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Department of Agricultural and ResourceEconomics, UCB

UC Berkeley

Title:The Mexican Common Property Forestry Sector

Author:Antinori, Camille M., University of California, BerkeleyRausser, Gordon C., University of California, Berkeley and Giannini Foundation

Publication Date:06-01-2010

Publication Info:Department of Agricultural and Resource Economics, UCB, UC Berkeley

Permalink:http://escholarship.org/uc/item/8qh479p8

Local Identifier:CUDARE Working Paper No. 1105

Abstract:This report summarizes preliminary findings of the Mexican National Database and CommunitySurvey Project which examines linkages between institutional characteristics in Mexico’s commonproperty forestry sector and economic and environmental outcomes. Framing the Mexicanagrarian community as a unit of analysis characterized by its history, individual members,resources, civic structure and property rights, we use institutional economic analysis to motivateproject design and research on three aspects of Mexican community forestry governance: first,how communities have engaged forest resources to participate in forestry markets; second,how internal models of forestry management are reflect historical circumstances and practices,policy trends and managerial preferences that are independent of vertical integration levels; third,correlation among market participation, internal organization and performance outcomes suchas conservation levels, wealth and income indicators and public and private goods investment.The project employs unique community-level survey data collected in Durango and Michoacanbetween 2005 and 2007 to summarize basic statistics to describe the sector from the pointof view of the project’s objectives. Preliminary results reveal an inverse relationship betweenintegration into production chains and material wealth measures, no correlation between internalgovernance models and vertical integration, and significant regional variation in institutionalcharacteristics. The emerging profile shows continually evolving and varied common propertyinstitutions and questions “one-size-fits-all” business models, pointing to the need for more specificunderstandings of the community forestry sector. The lessons learned can be applied to addressthe future role of “community” in Mexican economic and environmental policy, and, on a largerscale, the meaning of community forestry management in sustainable development strategies.

Copyright © 2010 by author(s).

University of California, Berkeley Department of Agricultural &

Resource Economics

CUDARE Working Papers Year 2010 Paper 1105

The Mexican Common Property Forestry Sector

Camille Antinori and Gordon C. Rausser

The Mexican Common Property Forestry Sector1

Camille Antinori2

Gordon Rausser3

June 7, 2010

1We are immensely grateful for the financial support of UCMexus, USAID and the Ford, Hewlettand Tinker Foundations throughout the various stages of this project. This paper has benefitedfrom the gracious feedback of seminar participants at the Workshop on Political Theory, IndianaUniversity, the Workshop on Forestry Strategies at the Forestry Institute of Quintana Roo, theEconomics Masters Seminar at the University of Quintana Roo, the Center for US-Mexico Studies,San Diego, Duncan MacQueen and David Bray. Thank you to Gary Casterline and Quoc Luong foringenious assistance with statistical analysis and reporting. The authors retain sole responsibilityfor any errors.

2Visiting Economist and corresponding author, Department of Agricultural and Re-source Economics, 207 Giannini Hall, University of California, Berkeley, CA 94720 USA,antinori@berkeley.edu.

3Department of Agricultural and Resource Economics, University of California, Berkeley

Contents

1 Purpose of Study 7

1.1 Why study Mexican common property forestry? . . . . . . . . . . . . . . . . 7

1.2 Project history . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

1.3 Organization of report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

2 Research themes and analytical approach 10

2.1 Asset ownership and control . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

2.2 Economic governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

2.3 Impacts of community forestry management . . . . . . . . . . . . . . . . . . 19

3 Survey Development 20

3.1 Sampling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

3.2 Survey sample . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

3.3 Instrument development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

3.4 Survey protocol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

3.5 Pretests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

3.6 Use of previously collected data . . . . . . . . . . . . . . . . . . . . . . . . . 28

3.7 Follow-up verification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

4 Profile Data 29

4.1 Community characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

4.1.1 Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

4.1.2 Land and forest area . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

4.1.3 Demographics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

4.1.4 Proximity to population centers . . . . . . . . . . . . . . . . . . . . . 34

4.1.5 Sources of income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

4.1.6 Literacy Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

4.1.7 Material Well-Being . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

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4.2 Development of Community Forestry Institutions . . . . . . . . . . . . . . . 39

4.2.1 Market integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

4.2.2 Internal organization for timber production . . . . . . . . . . . . . . . 43

4.2.3 Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

4.2.4 Decisionmaking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

4.2.5 Associations and NGOs . . . . . . . . . . . . . . . . . . . . . . . . . 50

4.3 Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

4.3.1 Volume . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

4.3.2 Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

4.3.3 Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

4.3.4 Financing forestry activities . . . . . . . . . . . . . . . . . . . . . . . 57

4.4 Measuring institutional impacts . . . . . . . . . . . . . . . . . . . . . . . . . 59

4.4.1 Investments in forest activities . . . . . . . . . . . . . . . . . . . . . . 60

4.4.2 Local public goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

4.4.3 Profit-sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

4.4.4 Protection of forest resources . . . . . . . . . . . . . . . . . . . . . . 65

5 Conclusions 70

5.1 Purpose of study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

5.2 Summary of findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

5.2.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

5.2.2 Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

5.2.3 Institutional analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

5.2.4 Questions for future research . . . . . . . . . . . . . . . . . . . . . . . 74

A Comparison of Typologies 81

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List of Tables

1 Community Classifications by End Product Sold . . . . . . . . . . . . . . . . 12

2 Internal Production Organization in Mexican Common Property Forestry . . 16

3 Total Forest Hectares in Ten States . . . . . . . . . . . . . . . . . . . . . . . 21

4 Average Forest Cover for Survey Population, by Vertical Integration . . . . . 22

5 Sample, by Forest Size and Vertical Integration . . . . . . . . . . . . . . . . 23

6 Forest Size Stratification Ranges . . . . . . . . . . . . . . . . . . . . . . . . . 23

7 Population Frame versus Survey Sample . . . . . . . . . . . . . . . . . . . . 25

8 Land and Forest Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

9 Population and Population Change . . . . . . . . . . . . . . . . . . . . . . . 33

10 Population Characteristics (average) . . . . . . . . . . . . . . . . . . . . . . 34

11 Sources of Income (Mean Percent of Households) . . . . . . . . . . . . . . . 36

12 Literacy Rates, 1990-2000 (Mean share of population) . . . . . . . . . . . . . 37

13 Household Utilities, 2000 (Mean share of population) . . . . . . . . . . . . . 38

14 Integration and De-integration History . . . . . . . . . . . . . . . . . . . . . 43

15 Internal Organization Systems . . . . . . . . . . . . . . . . . . . . . . . . . . 45

16 Who is Authorized to Make the Profit Allocation Decision? . . . . . . . . . . 48

17 Vertical Integration v. Internal Organization Decisionmaking . . . . . . . . . 48

18 Peer Monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

19 Forestry Association Membership . . . . . . . . . . . . . . . . . . . . . . . . 53

20 Origin of Forestry Association . . . . . . . . . . . . . . . . . . . . . . . . . . 53

21 Average Authorized Pine (m3) for Durango and Michoacan: All v. SampleCommunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

22 Total Employment by Occupation . . . . . . . . . . . . . . . . . . . . . . . . 57

23 Forestry Programs at Time of Survey . . . . . . . . . . . . . . . . . . . . . . 59

24 Frequency of Forestry Investments . . . . . . . . . . . . . . . . . . . . . . . . 61

25 Forest Reinvestment - Statistical Correlations . . . . . . . . . . . . . . . . . 62

26 Frequency of Local Public Goods Investments . . . . . . . . . . . . . . . . . 63

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27 Local Public Goods - Statistical Correlations . . . . . . . . . . . . . . . . . . 64

28 Conservation Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

29 Changes in Environmental Quality . . . . . . . . . . . . . . . . . . . . . . . 67

30 Impact of Subcommunity Organization . . . . . . . . . . . . . . . . . . . . . 69

31 Impact of Using GA for π-Distribution . . . . . . . . . . . . . . . . . . . . . 69

32 World Bank Typology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

33 PROCYMAF II Typology . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

34 Ownership and Control Typology . . . . . . . . . . . . . . . . . . . . . . . . 82

35 Internal Organization and Management Typology . . . . . . . . . . . . . . . 82

36 Organizational Capacity Typology . . . . . . . . . . . . . . . . . . . . . . . . 83

List of Figures

1 Institutional linkages in community forestry governance . . . . . . . . . . . . 15

2 Michoacan sample communities by type . . . . . . . . . . . . . . . . . . . . . 26

3 Durango sample communities by type . . . . . . . . . . . . . . . . . . . . . . 27

4 Oaxacan community-market participation, 1987-1997 . . . . . . . . . . . . . 40

5 Sample community-market participation, 1997-2007 . . . . . . . . . . . . . . 40

6 Timber authorizations, 1990-2010 (m3s of pine) . . . . . . . . . . . . . . . . 54

7 Total employment by forest size and vertical integration . . . . . . . . . . . . 58

8 Ecosystem changes by association membership . . . . . . . . . . . . . . . . . 68

Abstract

This report summarizes preliminary findings of the Mexican National Database andCommunity Survey Project which examines linkages between institutional characteristics inMexico’s common property forestry sector and economic and environmental outcomes.Framing the Mexican agrarian community as a unit of analysis characterized by its history,individual members, resources, civic structure and property rights, we use institutionaleconomic analysis to motivate project design and research on three aspects of Mexicancommunity forestry governance: first, how communities have engaged forest resources toparticipate in forestry markets; second, how internal models of forestry management arereflect historical circumstances and practices, policy trends and managerial preferencesthat are independent of vertical integration levels; third, correlation among marketparticipation, internal organization and performance outcomes such as conservation levels,wealth and income indicators and public and private goods investment. The projectemploys unique community-level survey data collected in Durango and Michoacan between2005 and 2007 to summarize basic statistics to describe the sector from the point of view ofthe project’s objectives. Preliminary results reveal an inverse relationship betweenintegration into production chains and material wealth measures, no correlation betweeninternal governance models and vertical integration, and significant regional variation ininstitutional characteristics. The emerging profile shows continually evolving and variedcommon property institutions and questions “one-size-fits-all” business models, pointing tothe need for more specific understandings of the community forestry sector. The lessonslearned can be applied to address the future role of “community” in Mexican economic andenvironmental policy, and, on a larger scale, the meaning of community forestrymanagement in sustainable development strategies.

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1 Purpose of Study

1.1 Why study Mexican common property forestry?

Mexican common property forestry refers to forest conservation and forestry productionoccurring in Mexico’s ejidal and indigenous communities where forest land is held ascommon property. Three major concerns have motivated the current research on thissector. The first concern relates to its connection with the broader phenomenon of“community forestry” which has gained global importance in the last two decades forestablishing rights to resources and sustainable development strategies (CIFOR 2009). Thealarming rate of destruction of forests, the incidence of poor people living around or inforests who have often relied on forests economically (White and Martin 2002; Chomitzet al. 2007), and the recognition of local institutions as viable means of sustainableresource management are critical aspects in the study of community forestry (Menzies2007; Schmink 2008). Low estimates place 22% of forests in the most forested developingcountries under local communal reserve or ownership (White and Martin 2002), and thisnumber may be growing (Khare 2009). Mexico is first worldwide in extent of commerciallyviable natural forest under communal property.1 Clarifying local property rights to forestresources has further significance for climate change mitigation efforts. Scholars refer tocommon property regimes as arenas for the study of a broad spectrum of human behavior(Dietz et al. 2002; Klooster 2000). Demand for knowledge in this area is high aspolicymakers struggle with finding practical strategies to incorporate local stakeholdersinto long-term natural resource management goals.

The second concern is disentangling the nature of Mexican community forestry itself. TheMexican Revolution of 1910 led to a dramatic redistribution of land rights from thehacienda holdings to peasant groups or communities. The meaning of “community” isestablished in the Mexican Constitution of 1917, defining the legal basis, governing bodies,rulemaking procedures and membership criteria. Nevertheless, up until the seventies, thestate claimed the right to timber extraction and leasing, or private firms made ad hocagreements with community members to buy or extract timber (de la Pena 1950; Merinoand Alatorre 1997). Resistance to these practices eventually led to a shift tocommunity-determined management and commercialization. Policy trends have witnessedthe recognition of community rights to exploit forest resources, the privatization of

1An oft-cited figure places the extent of Mexican forests (including tropical and temperate) in eji-dal/indigenous lands as 80%. However, this figure is now considered to be an overestimate, though moreupdated estimates await further clarification. The number of communities with forest land is estimatedas between 7000 to just over 9000. Wilshusen (2003) traces these figures back to the original sources andfinds that confusion exists on the definition of forest, for example, whether the original estimates includeclosed canopy forests only or a broader definition that includes arid and semi-arid lands and wetlands (pages132-33, note 36). Newer estimates place the estimates in the range of 30-60% (Antinori (2008), Juan ManuelTorres-Rojo, personal communication, April 14, 2008; David Bray, personal communication November 15,2009). In general, however, it is recognized that Mexico is still first in extent of community timber productionworldwide.

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professional forestry services and most recently an emphasis on reducing deforestation.2

Despite changes to agrarian law, outright ownership of forests is unlikely to change handsin the near future. The coincidence of poor rural populations and deforestation does notoccur in Mexico in communities with forestry management activities. Many areas ofMexico’s worst deforestation lie where no commercial forestry activity occurs or where noforest management plan is in place (Deininger and Minten 2002; Bray et al. 2003; Duranet al. 2005), suggesting both a conservationist and commercially productive role forcommunity forestry. Yet, vast underinvestment and inefficient management and productionremain as obstacles to further growth and improvement in this sector.

The third concern is the lack of empirical data on the community forestry sector’sinstitutions, that is, systematic information on rules governing use of the resource,decisionmaking processes, stakeholders and governance as a whole despite its importance asa management model for natural resources. The World Bank’s governance indicatorsproject (Kaufmann et al. 2009) attests to the greater acceptance of institutional features ineconomic development; however, these indicators are rarely available at the localcommunity level. Yet, scholars and practitioners using case studies have identified theseindicators as key determinants of the success or failure in reaching performance objectives(Macqueen 2008; Chomitz et al. 2007). White and Martin (2002) is the first accounting oftenure control over the world’s forests and includes definitions of communal rights in itsproperty rights typology. The International Forestry Resources and Institutions (IFRI)project is filling this information gap by building a cross-spatial and over-time database ofresources institutions (see http://www.sitemaker.umich.edu/ifri/home) (Ostrom andNagendra 2006). Research specific to forestry and Mexico has yielded some of the firstcross-sectional studies on community forestry institutions (Antinori and Rausser 2008;Perez-Cirera and Lovett 2006). However, a Ford Foundation report (Bray andMerino-Perez 2002) found that no firm data exists on the extension of forests managementby communities nor types of management regimes across Mexico as a whole. Therefore, thefull level and scope of community timber production and ecosystem management efforts areuncertain. Individual case studies (Merino and Alatorre 1997; Moros and Solano 1995) andthe Antinori and Rausser (2008) study reveal the full range of capacities for downstreamprocessing across communities, from selling stumpage to finished products hewn incommunity-owned sawmills which are not determined solely by technical production inputslike size of forest. Furthermore, at each level of processing capability are further variations:community-level organizations, subcommunity-level work groups, parcelized forests, andunions of communities organized to share costs of technical services and capitalinvestments. Before policy formulations can be made, more in-depth work is required tounderstand the institutional basis of this sector.

The project frames Mexican community forestry management as a mode of governancedistinct from the private firm or public bureau, where the Mexican agrarian community is a

2See Antinori and Garcia-Lopez (2008) for detailed account of changes in forest policy over last fortyyears and current laws.

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unit of analysis characterized by its history, individual members, resources, civic structureand property. These are also viewed as continually evolving institutions, rather than staticconcepts, which are shaped by incentives to benefit from local resources. A fundamentalconcern is how different forms of collective action in timber production affect distributionof monetary and nonmonetary benefits among local and nonlocal stakeholders. A full rangeof decisions encompass how forests are managed. In the research design, we trace outdecisions as they translate into activities and practices in forestry management, includingdecisions that are made mostly by internal members of the community and those that areinfluenced or guided mainly by external rules and regulations, such as for example, limitsto the amount of harvesting that can occur legally in a given forest stand per year. In thisway, the research bears much similarity to ostrom’s work by explicating rules in use incommon pool resource management. To analyze the collective production decisions , mostlybut not exclusively around timber products, we draw on the transaction cost literature andrelated contract theory to understand how incentives are affected by accountability,uncertainty and monitoring mechanisms in the chain of production. These distinctions indecisionmaking processes and structures are characterized by different lines of questionswithin the survey instrument and then analyzed according to our theory and hypotheses.

1.2 Project history

The research grows out of a collaboration by Florida International University, Centro deInvestigacion y Docencia Economica and the University of California-Berkeley to fill thisgap in information. Phase One of the project began in 2003 to combine into one databaseall state permit files kept in the separate state offices of the Secretaria de Medio Ambientey Recursos Naturales (SEMARNAT).3 Phase Two activities began in 2005 to collect surveydata from a sample of common property forest communities drawn from the Phase Onedata for more in-depth analysis. This report covers the activities and preliminary researchfindings of the Phase Two survey data effort.

1.3 Organization of report

This report summarizes the questions, objectives, methodology, basic results and futurework of the community-level survey component of this project. Section 2 describes theunderlying theoretical concepts guiding the the overall research project. Section 3 explainsthe survey instrument design and data sampling techniques. Section Four begins thesummary of data from the surveys collected from 41 communities in two states in Mexico.As an extensive amount of information was collected, this report reports basic results tointroduce information previously not collected or known and to identify critical areas offurther research.

3See Antinori, Magana, Torres Rojo, Bray, and Segura (2004) for full description of the Phase One effort.

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2 Research themes and analytical approach

Economic governance provides the organizing theme for this research project. Dixit (2009)defines, for the purpose of discussion, economic governance as the structure andfunctioning of legal and social institutions which support economic activity and economictransactions. Recent work in this area sends a clear signal that there is no automatic linkbetween one form of governance and specific performance outcomes, like economic growth,development or environmental conservation. It is unsurprising that this applies not only ona macroeconomic scale (Rodrik 2004) where the governance indicators have been widelyapplied, but also on a microeconomic-political scale (Wunder 2001). The set of institutionswithin a system of “good governance” assures security of property rights, enforcement ofcontracts and collective action to produce public goods and constrain public “bads” (Dixit2009). Such governance occurs as contracts, customs, norms and laws in both market andnonmarket economies rather than through single formal prescriptions, like privatization ofprivate property. The policy forms described as “community forestry” include devolution,decentralization, state-sponsored community forestry management, indigenous localmanagement recognition, co-management, formally recognized common property, amongothers. Nevertheless, it may be said that community forestry governance relies on systemsof collective action often bound by formal and informal rules and customs, local andnational political agendas and socioeconomic needs (Arnold 1999; Jodha 1992).4

To bring economic governance into a tractable analytical framework, our approach buildson earlier work on contractual hazards in Mexican community forestry (Antinori 2000;Antinori and Rausser 2008) and then expands the analysis using political-economic theory(Rausser, Swinnen and Zusman, in progress; Zusman 1992) to incorporate the role ofinternal and external actors in decisionmaking over forest resources. We follow Ostrom inconsidering that common-property based systems of natural resource management are aviable “third way” of management, in addition to governmental and private options(Ostrom 1990; Ostrom and Nagendra 2006). We address the challenge of parsing out whatmechanisms of governance whether they follow more general principles of collective actionand organization.

The focal questions for this research can be summarized as follows:

1. Under what conditions have communities chosen to participate in the market for

4Timber harvesting by or for local communities is prevalent worldwide in many different forms. Examplesexist in Asia (e.g., Vietnam, Nepal, India, China), Africa (e.g., Cameroon, Zimbabwe, Senegal), Europe (e.g.,Romania, Bulgaria, Germany) and Latin America (e.g., Guatemala, Honduras, Chile, Nicaragua) (Scherret al. 2002; Ribot 2002; Ribot 1995; Abraham and Platteau 2003; Oyono 2004; Arnold 1999). In many cases,the local right to harvest has only recently been given in pursuing “devolutionary” policies or recognizinghuman rights. In other cases, the term community forestry is applied to households with woodlots forindividual collection of firewood (e.g. China). The only other countries in which community-engaged timberharvesting exists on a scale comparable with Mexico is Guatemala and Bolivia (Benneker 2008). No matterthe location or history of the sector, the capitalization of community forestry is highly uneven.

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forest resources and at what level in the production chain?

2. How have they organized their production and contracting activities within thecommunity governance structures?

3. How do governance characteristics, including both internal and external influences inthe decisionmaking processes, affect the distribution of public and private benefitsfrom forest activities, including environmental conservation practices, public goodsinvestments, and direct economic benefits?

Each of the following subsections describes the background of Mexican community forestryand the analytical basis with respect to these three lines of inquiry. The first questionbrings us to the insights in economic theory on the importance of asset ownership andcontrol, as each stage in the production chain requires investments in capital andmanagerial responsibilities. The second question calls for a consideration of decisionmakingprocesses in light of the growing literature on collective action and economic governancewhich characterizes these processes in terms of inclusiveness, representativeness,transparency, democratic accountability and regulatory quality, for example. Both internaldecisionmaking processes and relationships with outside contractors would shape thesecharacteristics. The third question then relates the institutional features represented byform of market participation, internal governance and external relationships to outcomes ofinterest, particularly economic, social and environmental impacts. The background detailsin each subsection describe the on the ground situations that clarify how the analyticalstrategies apply, as this topic - not to overstate the issue - is highly complex, interweavingbroad national policy dynamics, historical establishment of rules and practices that persisttoday, and continual local innovation of community governance institutions.

2.1 Asset ownership and control

Despite its over twenty year history, numerous reports emphasize the underinvestment ofthe Mexican social forestry sector and suggest improvements in human and social capital,internal organization, and more recently, stronger links with the private sector to improveefficiency and environmental management (UNDP 2009; Forster et al. 2004). Our researchapproach relies on an analysis of the transaction costs of ownership and control to explainin part this situation.

Ownership and control over the assets used in production, like chainsaws, cranes, trucks,tractors and sawmills, has huge implications for the transaction costs of production woodproducts to achieve a range of objectives, including monetary and nonmonetary benefits.Much research on this problem is cast within the vertical integration paradigm (Globermanand Schwindt 1986; Leffler and Rucker 1991). Vertical integration represents the ability tobenefit from residual flows through ownership of assets of production. Incentives are

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therefore altered depending on whether the person making a decision on how to allocateassets is the owner or an outside manager. Control does not equal ownership. With greateruncertainty and inability to monitor managers adequately, vertical integration is preferablebecause it assures greater ability to manipulate the flow of assets over time through thethreat of withdrawing an asset from the manager’s control (Forbes and Lederman 2008).Ownership and control are therefore distinct concepts. Transaction cost factors determinewhen both ownership and direct managerial control are exercised to optimize communitybenefits. Antinori and Rausser (2008) provide evidence to support the claim that themultiple objectives in a high transaction cost environment such as Mexican social forestryare more easily balanced the further downstream a community integrates into the industry.This approach shares conceptual similarities to the “theory of access” (Ribot and Peluso2003) which characterizes access as the capacity to benefit from things as opposed to amore narrow definition of access based on property rights alone. The capacity to benefitfrom things depends on transaction costs, knowledge, wealth and political influence. In ourapproach, a property right is only one aspect of access, while control is another.

Table 1 describes the classifications used.5 Note that the classification depends on mostprocessed wood product sold to allow consistent criteria for indicating ownership andcontrol rights.

Table 1: Community Classifications by End Product SoldNo-sale Communities with over 300 hectares of forestland suit-

able for commercial production but which do not partic-ipate in the industrial wood products markets.

Stumpage An outside contractor pays for the right to harvest andextract timber on community land.

Roundwood The community fells timber to be sold as roundwood ei-ther from the logging road (en brecha) or a collectionpoint (en patio).

Sawnwood The community transforms timber into lumber.

A continual sticking point in discussions of the Mexican community forestry sector is theextent to which internal organization, level of vertical integration and “success” areinterchangeable. It is important not to confound vertical integration with certainoutcomes. For example, it is possible to earn profits for example at any level of production

5In Antinori (2000) and Antinori and Rausser (2008), a fifth category for secondary processing (e.g.finished or semi-finished goods, like doors, furniture, palettes, tool handles, and dried and treated woodfor export) is separated from the sawmill category because of the much higher capital inputs and tech-nical expertise, setting these communities apart from other sawnwood communities. The governmentalprograms, Programa de Conservacion y Manejo Forestal (PROCYMAF) and Programa de Desarrollo Fore-stal (PRODEFOR) (both now combined under PROARBOL, and the World Bank use similar classificationsto target funding activities to the perceived needs of communities at each level. These programs originallyused only four levels of the classifications, eliminating the last category of secondary products and combiningthat with the sawnwood category. The recent follow-on to these programs has added the fifth.

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(see http://are.berkeley.edu/ antinori/ConaforPresentEng.pdf). Furthermore, higher levelsof community vertical integration do not correlate with nor predict environmentaldegradation (Antinori and Rausser 2007). On the contrary, communities with forestmanagement plans do as well or better as Mexico’s officially designated National ProtectedAreas in protecting forest cover (Duran et al. 2005; Bray et al. 2008). The Appendixrecords a variety of typologies created to examine the Mexican forestry sector, though moreexist. An example of a typology that incorporates style of internal organization byNahmad (2004) draws on characteristics of products sold, organizational capacity andparticipation in the production process. Vertical integration patterns map overconfigurations of internal organization and external relationships but not in a one-to-onepattern. This social, economic and “communitarian” taxonomy speaks to the institutionalcomplexity of this sector. Which taxonomy is used is a function of a study’s goals andpurpose. This report parses out processing capacity, internal organization and performanceas separate descriptors and examines their relationships separately.

2.2 Economic governance

The second fundamental question asks what governance mechanisms exist for communityforestry in Mexico and, if possible, why they exist. The communities in the sample exhibita dizzying array of institutional forms and external linkages. For example, communities atthe same level of integration can have a variety of internal governance systems. Theevidence echoes Rodrik (2004)’s statement that “institutional functions do not map intounique institutional forms.” Mexican forestry communities are no exception. We hope toshed light on these various aspects of governance for a holistic view and with an eyetowards shaping policy for rural development. Consequently, we go into some detail in thissection because the institutional complexities and extent of overlapping decisionmakingprocesses are rarely recognized in any research to date on Mexican community forestry,details which could inform development of long-lasting solutions to management challenges.

Figure 1 shows actors and processes in forestry decisionmaking, though by no meanscaptures all nuances of these relationships. Starting at the community level (Community1), the basic community governance structure follows the format codified in Article 27 ofthe Mexican Constitution, so that all communities share the basic core governanceelements. The Comisariado de Bienes Comunales (CBC) (or Comisariado de BienesEjidales (CBE) if the community is officially titled as an ejido) and the Consejo deVigilancia (CV) are elected by the General Assembly consisting of officially recognizedcommunity members (one vote per member household). The vigilance officer oversees theintegrity of the office of the CBC and the territory of the community, for example,organizing border patrols. These leaders are civic, political and economic agents of thecommunity, at times reflecting centuries-old practices of the historical caciques (Terraciano2000) and the traditional system of cargos whereby community members rotate civic dutiesamong themselves. The CBC and CV’s term is normally three years, after which a new

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election is held. Though not shown, other elected offices besides the CBC and CV exist aswell, depending on the needs of the community, such as a point person for the health clinic,transportation and community religious celebrations.

Balancing the monetary and nonmonetary benefits achievable with common propertyforestland has been called the “permanent tension” within Mexican community forestry(Arzola et al. 1993). Foresters and other persons working to establish sound andsustainable forestry practices within communities have long realized the challenge oforganizing a “sectoral economic activity” such as forestry from within the agrariancommunities without being constrained by the agrarian administrative forms, which werenot conceived for collective entrepreneurial activities (Herrera et al. 1995; Gordillo et al.1998; Lopez-Arzola 2005). However, although they appear overtly similar acrosscommunities, the actual governance structure for managing forestry matters, that is thedecisionmaking processes and structure, has been evolving to address the competingdemands for the allocation of common property benefits.

Earlier work identifies at least three forms of internal organization for timber production.Table 2 summarizes the frequency of these three modes from two cross-sectional surveys,including the current survey. The first and by far the most common is the community-levelform of production. The CBC is the point person in charge of forestry activities and wouldbe the contact, for example for the professional forester and potential buyers. Communitiesorganize timber production activities at the community level, that is, any contracting,sales, extraction and processing occur with decisionmakers who represent the entirecommunity, usually the CBC. As communities participate more extensively in forestryactivities, the General Assembly or CBC may appoint additional managers, such as loggingforemen, sales manager or sawmill manager. Documenters (often one from the communityand one from the buyer) measure and keep records of extracted volume. The rotation ofkey community officers poses noted difficulties in adopting long-term forestry managementstrategies. To overcome this obstacle, some communities have created permanent forestrycouncils or separated communal forestry activity into distinct legal entities apart from thetraditional community structure itself (Antinori et al. 2006; Antinori 2000).

The second and third forms are the work groups and the individual modes of production.These organizational models have emerged based on historical practices in managing theforest, more recent federal policy changes and, given evidence in our survey, internaldissatisfaction with community-level organization. The 1992 reforms sanctionedsubcommunity-level work groups (grupos de trabajo) although such organizational choicesremain with the General Assembly. Work group leaders or individual parcel holders willcontact outside buyers on their own and groups compete to get the best price. Workgroups may form based on affiliations among family or friends and may represent othernonforestry-related interests, indicating a sub-coalition of interests within the communitythat may affect voting in the General Assembly. Work groups often have a leader elected orappointed from within the group. Individuals may in fact organize informally from year toyear to conduct the extraction and sales efforts. These alternative forms of production do

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Figure 1: Institutional linkages in community forestry governance

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Table 2: Internal Production Organization in Mexican Common Property Forestry

State and Data Source Community Work group Individual Survey TotalDurango (Survey data 2007) 21 4 3 28Michoacan (Survey data 2007) 5 1 7 13Oaxaca (Antinori 2000) 35 2 5 42

not map precisely to levels of vertical integration, so that specialization and delegation inproduction does not explain the reasons for one form of internal governance over another(Antinori 2000; Antinori and Fransen 2008; Wilshusen 2005; Taylor 2003).

It is critical to emphasize that forestry management plan in all cases, regardless ofextraction and processing organization, is done at the community level, that is, there is onemanagement plan per community (except in rare cases). In a typical scenario, the foresterwill assign the authorized volume to the community in any given year and delineate theareas where harvest is to occur. The manner of dividing up the volume among work groupsor individuals is left to the internal workings of the community. Often, members hold alottery (rifa) to assign areas of harvest, as the areas differ in accessibility and quality oftimber, though everyone is assigned an equal volume. Once these areas are assigned, it isleft to individuals or work groups to arrange harvest and sale of timber. Therefore, flow,and not stock, is divided at the extraction phase. Even under these alternative governancemodes, the CBC and CV may maintain some decisionmaking role, as contacts with thegovernment or PST, for example, or assuring the conduct of one community documenter orJefe de Monte who assist all work group or individual forestry activities in the community.

Now we explain the external linkages to the community, starting with the federalgovernment’s role. The government has decisionmaking influence at the individualhousehold, associational, non-forest communal and communal forest levels. Households canparticipate in many government programs (e.g. Oportunidades, Procampo) which offeradditional sources of income including agricultural subsidies. All land in the community isheld in common, but agricultural land is allocated to individuals who then have usufructrights to cultivate individually. Forest and non-forest community-government linkagesoccur as functions of the agrarian system. Forests remain as common property.Technically, the Mexican government retains ownership of community land but recognizesde jure ownership of the land by the communities (UNDP 2009).6 As a result, governmentofficials or agrarian tribunals are ultimately engaged in land issues, like territorial disputesat the general, communal level. However, the agrarian reforms removed some rules for

6Although the Agrarian Reform of 1992 allows communities to privatize land holdings, an extremely smallpercentage of approximately 30,000 agrarian communities have chosen to do so (IBRD 2008). Reasons areunclear. One concern is that forest land would convert to state control and privatized individual plots wouldbecome taxable, perhaps discouraging the decommissioning of agrarian community status (Goldring (1998)and interview notes with key informants and community leaders).

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government participation to give communities more autonomy (e.g. requirement that agovernment representative be present at General Assembly meetings). For communityforestry, the government has considerable rules and policy in place, such as requirement ofa forestry management plan for harvesting activities, required permits for harvestingcertain timber and nontimber goods, documentation, standards for forestry professionals,and environmental programs as administered by CONAFOR.

Forestry associations (FAs) constitute another important external linkage for the Mexicanforestry sector in terms of number of communities they represent and their role in thehistorical development of the sector. FAs form a cross-scale linkage among communitiesinvolved in forestry management and production as well as among communities and higherlevels of state, national and international organizations.

Ideally, forestry associations capitalize on synergistic effects of group action. Servicesinclude cost sharing of forestry technical services, access to technical and managementexpertise, coordination to access financial resources from government programs, politicalaction and voice, information sharing and community timber purchases and harvestcoordination at premium prices. In many states, the community-based FAs have theirorigins in the social mobilization against the parastatals during the concessionaire era. Thefederal government also has a community linkage at this association level as well. Thegovernment has often created or supported forestry-related associations of communities(Gordillo et al. 1998) or channeled program resources through other forestry associations.Recently the government has mandated that communities form “silvicultural” associationsregionally. The new associations, called Unidades de Manejo Forestales (UMAFORs),created under CONAFOR is a current example of government participation in aforestry-related decisionmaking platforms. These may be considered as an external linkagecategorized as a FA or as a government administrative unit.

The professional forester (prestador de servicios tecnicales , or PST) is responsible forcreating the management plan, marking trees and conducting other silvicultural treatmentsas needed throughout the year. A main service is ushering the proposed management planthrough the permit process in SEMARNAT. Though PSTs generally try to stay out of themarketing and selection of downstream buyers, occasionally the PST will associate with abuyer or buy the community’s wood products directly. Some PST services are providedthrough forestry associations (link not shown). Indeed, some FAs formed for the solepurpose of combining the costs of PSTs across a set of communities. In all cases though,the PST must form relationships with each community to develop management plans andfulfill their responsibilities.

The occurrence of nongovernmental organizations (NGOs) and services offered is extremelysporadic across Mexico, with some states well-represented by NGOs and other states wherebarely any operate. Their role may vary from offering environmental expertise, marketingservices or developing production chains with timber and nontimber forest products. Theirrelationship with governmental administrative offices is ad hoc rather than systematic.

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By comparing who makes what decisions and how they are authorized to make thosedecisions, we can form a basis for applying economic and organizational theory to linkgovernance with outcomes. We not only consider how relationships play out in anentrepreneurial setting, for which there is a vast literature in the business and economicjournals, but also dynamics particular to the political and social culture of the Mexicanagrarian sector. Starting with the concepts of transparency and accountability as majorfactors in the governance literature, we explore how transparency and accountability isachieved in Mexican community forestry. Mechanisms providing transparency andaccountability, we suppose, improve the effectiveness with which leaders and communitymembers provide local benefits from community forestry operations. Where members havean active and influential voice, one would expect the group to have greater ability inreaching stated objectives, be it productivity, sustainable resource management oreconomic development (Hoddinott et al. 2001; Wittman 1995; Vitaliano 1983; Hirschman1970; Manne 1965). Of particular concern for devolution of natural resource managementis the problem of local elites, or “covert privatization” of resources (Klooster andAmbinakudige 2005; Fritzen 2007; Abraham and Platteau 2003). Political domination bylocal bosses can hijack state efforts to improve management through local decisionmaking(Johnson et al. 1999; Klooster 2000; Abraham and Platteau 2003). Studies specific toMexico corroborate the importance of the General Assembly in this context (Merino andAlatorre 1997; EDUCA 2001; Klooster 2000; de Janvry et al. 2001). Community managersmust elicit support from the local population. The relationship between communityauthorities as managers and the rest of the community population has been characterizedby the use of the General Assembly (Klooster 2000) and by measures of local powerinequality, such as illiteracy rate, disparity in assets and external connections (Perez-Cireraand Lovett 2006). Zusman (1992) further argues that the choice of rulemaking proceduresreflects an optimal balance between the costs and benefits of having larger number ofdecisionmakers and the value of the decision being taken.

The survey asks community representatives to flesh out the relationships represented byFigure 1 in terms of their own community. Community representatives mapped theirgovernance structure, including both cargo and non-cargo offices or personnel (both generaland forestry-related), history and membership in forestry and non-forestry associations,community and residents’ participation in government programs, and role of ofnongovernmental organizations. The evolution of internal production organizations iscaptured within the main survey for community-level forestry production as the defaultoption and in subject-specific annexes for work groups and individualized systems.

Furthermore, the survey traces key decisions affecting the distribution of resources in thecommunity. Previous research identified key internal forestry decisions as granting wage ordividend advances, choice of buyer, choice of volumes to cut, and distribution of dividends.For each of these decisions, survey respondents were asked who makes these decisions, whoauthorized that person/s to make those decisions and the involvement, if any, of theGeneral Assembly. These questions therefore capture the concepts of delegation ofauthority based on type of decisions made and the degree of oversight mechanisms in place

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for those decisions in Mexican agrarian communities. Further characteristics we considerfor monitoring mechanisms to hold decisionmakers accountable are characteristics of theGeneral Assembly and General Assembly meetings, reporting, selection of leaders, groupsanctions, social capital (trust and networks), and third party engagement for audits,access to information and oversight.

In addition, we collect data on sources of heterogeneity among the community populations,as these are often considered in the literature as explanatory variables for collective actionoutcomes (Dayton-Johnson 2000). These included members, the ejidatarios or comuneros ,versus nonmembers, the avecindados or the posesionarios . Only official members can votein the assembly and receive monetary benefits generated from the commons. Otherinterests were divided between young and old, where the younger generation preferredinvestments in labor-saving technology while the older generation preferred socialinvestment (Fernandez). Interests also differ according to wealth status in the community,say between those who own businesses that need timber as an input into production, andthe rest of the community. Questions to identify these and other groups are included in thesurvey.

2.3 Impacts of community forestry management

Our final major question is the impacts of the ownership and governance characteristicsdescribed in the previous two sections on benefit streams which forests can provide andtranslating those benefits into mensurable performance indicators for statistical analysis.To ground the analysis in economic theory, it is useful to view forests as providing private,public and common goods and services. The forest is a local common resource for membersof the community because it is rival in use (one person’s harvesting of forest productsmakes those products unavailable to the next person) but also nonexcludable amongmembers of the community (because anyone in the community can use the forest).Furthermore, a community member usually must ask permission from the CBC to harvesttimber or nontimber goods from the forest, so that we have a common pool resourcemanagement system not necessarily subject to the tragedy of the commons. The Mexicanforest also has an element of private goods (rival and excludable) because a community canexclude nonmembers and anyone outside the community from using the forest. The forestis a pure public good both locally and globally when it generates ecosystem services of air,soil and water quality and existence value. Local public goods generate benefits for thecommunity as a whole (e.g., revenues to support local infrastructure, local environmentalservices, job generation).

In this study, we consider benefits influenced by conscious choices by the communitymembers in choosing specific allocations of funds and actions. For private benefits, thesurvey includes questions on the distribution of repartos or dividends that are paid tocommunity members from timber proceeds, individual collection of timber and nontimberforest products, and other income generated by forestry activities. Local public or common

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resource benefits captured in the survey consider economic and environmental investmentsback into the community. Details include the range and character of reinvestment backinto forestry, local public goods, like schools and health clinics, and management orconservation practices. For pure environmental public goods, ecological indicators aredrawn from the forest management plan and survey questions. Characteristics drawn fromthe management plan include extent and density of standing forest, size and agedistribution of trees (for some communities), climate, slope, altitude, and erosion levels.Self-reported quality measures from the survey are indicators of changes in forest cover,biodiversity and water quality. Conservation practices include community members’ “ruleconformance” to protect and maintain the forest.7 In the present study, practices includelimits on hunting, conservation reserves, degree of illegal logging and clearing forest landfor agriculture or pasture and fire preparedness activities.

To consider how a link between an institutional characteristic and a performance outcomemight evolve, consider vertical integration and ecological indicators. Vertical integration bythe community may lead to better performance on a given ecological indicator if theecological indicator depends on adaptive, ecologically significant decisions more easilyaddressed by the community than by an outside independent private operator. The linkmay not be necessary, say, if one were able to separate the timber production activitiesfrom the activities which affect the ecological indicator, by easily monitoring or measuringthe separation of activities (say, by restricting harvest areas) so that it would not matter ifthe community or an outside operator harvested the timber. The operative questions inthis case are: over what do you exercise control and when is it necessary?

3 Survey Development

Survey development and data collection methodology is designed to support testing oftheoretical research on common property and to answer basic empirical questionsconcerning Mexican community forestry.

3.1 Sampling

We used two sources of data as the population frame. First is a dataset compiled from thepermit records maintained by the SEMARNAT state offices in ten of the most forestedstates in Mexico: Campeche, Chiapas, Chihuahua, Durango, Michoacan, Oaxaca, Puebla,Guerrero, Jalisco and Quintana Roo.8 SEMARNAT is the government agency responsiblefor reviewing management plans and issuing permits for harvest for agrarian communities

7Empirical studies of rule conformance in natural resource management include Lam (1998), Bardhan(2000), Fujiie, Hayami, and Kikuchi (2002) and Gibson, Williams, and Ostrom (2005).

8Data is summarized in Antinori, Magana, Torres Rojo, Bray, and Segura (2004).

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Table 3: Total Forest Hectares in Ten States

State Total forestedhectares

Total forestedhectares

Total

with permits without permits(SEMARNAT) (NFI)

CAMPECHE 978304 972519 1950824n=63 n=253 n=316

CHIAPAS 194499 1126535 1321035n=127 n=1068 n=1195

CHIHUAHUA 2668271 557180 3225451n=217 n=106 n=323

DURANGO 2407992 292922 2700914n=296 n=102 n=398

GUERRERO 670579 281612 952192n=120 n=307 n=427

JALISCO 419731 281219 700950n=151 n=265 n=416

MICHOACAN 257265 167000 424265n=245 n=287 n=532

OAXACA 568428 922876 1491304n=197 n=523 n=720

PUEBLA 76493 32466 108960n=143 n=90 n=233

QUINTANA ROO 580004 869897 1449902n=82 n=176 n=258

Total 8253141 5504230 13757370n=1641 n=3177 n=4818

and small private landholders. As this dataset does not include communities with forestsbut no history of permits, the second source of data is the 2000 National Forest Inventory(NFI) to identify communities with area classified as forest (bosque) but not included inthe permit database.9 The total in these ten states is 4818 verifiable communities withsome 14 million hectares of forest (Table 3).

There is much theory and speculation that size of forest primarily or solely explainsvertical integration into the forest industry and that vertical integration in turn explainsenvironmental, social and economic outcomes. To test these hypotheses specifically, weconstruct a random stratified sample based on measures of forest size and verticalintegration using the best available information possible. Programa de Conservacion yManejo Forestal (PROCYMAF) and Programa de Desarrollo Forestal (PRODEFOR)

9The permit database has forested hectares information for 1710 observations with some missing data,so that the total is 1641. The permit database provided no information from the state of Oaxaca but isestimated using the Antinori (2000) database.

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Table 4: Average Forest Cover for Survey Population, by Vertical Integration

Mean SD Mean forest/land NVI level forest ha. (linearized) ratioNo-sale 3377 351 0.51 1994Stumpage 4820* 359 0.67* 483Roundwood 6574* 592 0.67 309Lumber 16944* 2396 0.72* 126

Total 4543 281 0.56 2912

Source: Phase 1 data.

* = sig. diff. from group above.

(both now combined under PROARBOL, both maintain information on vertical integrationas types (tipos) of communities. While definitions slightly vary (see Appendix), bothclosely follow the concept of end product sold. The categories in this case follow a linearadvancement along the main production chain: 1) those with commercially viable forest butno commercial timber sales, 2) those selling stumpage rights to standing timber, 3) thoseharvesting timber and selling roundwood, and 4) those harvesting and processing timberinto sawnwood. For forest size, we used the number of forested hectares as recorded in theSEMARNAT and NFI data. The no-sale type, for our purposes, includes communities inthe SEMARNAT permit database whose last permit ended five or more years prior tosampling in addition to communities in the NFI database with forest cover but no harvestpermits evident in the SEMARNAT database. This combined set of observations includes4886 communities.10 Since our goal is to understand forestry institutions and outcomes incommunities where commercial timber production is possible, we limited the populationframe to communities with 300 hectares or more of forested hectares. This number isconsistent with idea that a “commercially harvestable” forest would be one where a harvestwas possible every five years or less, as judged by professional foresters on our team andconsulting with other professional foresters. Eliminating communities with less than 300forested hectares and those whose type is not recorded, we have a population frame of 2912communities (Table 4). The difference between “forest” category and “commerciallyproductive potential” became apparent during fieldwork and is further discussed below.

3.2 Survey sample

The sampling technique is a random sample stratified by size of forest and marketparticipation (vertical integration) level. Vertical integration levels were known for some

10Some of this data is summarized in Bray and Merino-Perez (2007) where the totals and averages areslightly different due to different stages of data cleaning. The numbers in this report should be consideredthe most up-to-date.

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Table 5: Sample, by Forest Size and Vertical Integration

Average ha. within strata No-sale

StumpageRoundwoodLumberTotal

0.50 428 8 1 0 43750 292 23 16 1 332100 522 38 40 1 601239 364 56 30 5 455400 394 43 16 4 457608 304 88 30 6 4281,000 371 69 42 3 4851,677 332 64 49 12 4573,016 278 87 69 22 4566,645 184 101 89 83 457

Total 3469 577 382 137 4565

Source: Phase 1 data.

Table 6: Forest Size Stratification Ranges

CategoryNo-sale Stumpage and

aboveForest Size Strata Hectares Hectares

Strata 1 100-556 300-850Strata 2 556-1357 850-2000Strata 3 1357-3077 2000-4500Strata 4 3077-6186 4500-9250Strata 5 6186+ 9250+

Source: Phase 1 data.

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degree of precision except for the no-sale category. Communities which had more than 300hectares of potentially commercial forest but which had not harvested in the last five yearswere relatively easy to identify from the SEMARNAT permit database. However,identifying such communities which had never had a permit and thus were drawn from theNFI database was much more difficult, due to ambiguity in defining “forest” with the GISdata. Therefore, we combined the no-sale types from both databases but maintained theentire list to be available to enumerators in the field so that they could crosscheck theirinformation in the field prior to visiting a community and replace an invalid observationwith a valid observation as necessary.

For stratifying by forest size, we used Cochran’s formula (Cochran 1963) to determinecutoff points for forest size levels from smaller to larger forests. The formula seeksgroupings of similar number which minimizes variance of the variable of interest, in thiscase forest size, within each group. The no-sale communities from the NFI database havemuch smaller forest sizes on average than the no-sale group identified in the permitdatabase, again indicating a disjunction either in measurement or in a qualitative feature ofthe NFI communities. Combining the two datasets and applying the stratification exerciseto the entire sample results in the groupings in Table 5. The majority of the observationsfalling into the lower ranges (up to about 600 hectares) are from the NFI database,especially the no-sale types.

To create the population frame forests), we nevertheless combined the two sources ofno-sale communities and stratified them separately from the stumpage and abovecommunities. Running the stratification exercise using six levels of strata gives the mosteven set of groupings for the no-sale dataset on the one hand and the stumpage and aboveon the other hand. Eliminating the lowest strata for each group, we use the ranges shownin Table 6 to stratify the sample by forest size. The stratification of stumpage group andabove naturally selects 300 hectares as a cutoff point, further justifying our selection oflimiting the sample to communities with 300 hectares or above. The corresponding stratumfor the no-sale communities is skewed to a smaller size, though only those with 300hectares or more are used for sample selection.

We performed the same exercise for each of the ten states (except Oaxaca) and comparedstate against total distributions. Durango, Michoacan and Chihuahua had distributionsthat most closely matched the total sample set and had observations in the full range ofcells. We chose Michoacan and Durango as the most representative and cost-feasible statesto survey. Because the no-sale group would overwhelm our survey efforts if we strictlyapplied the distribution, we capped the stratified sample of no-sale communities to ten andthen randomly selected a stratified sample of 31 from the commercially-engaged set toarrive at a total sample of 41 in Michoacan and Durango (Table 7). Before contacting ano-sale community for a possible survey interview, we consulted with local SEMARNATforestry personnel. As expected, many did not meet our criteria and were switched out forno-sale communities in our list which did.11 In sum, of the total 41 communities surveyed,

11During fieldwork, we came across an alternative way of determining whether a forest has “commercial

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Table 7: Population Frame versus Survey Sample

State

Durango Michoacan Total

Total Sample Col%

Total Sample Col%

No. Col%

Cum%

Vertical integrationNo sale 136 4 14.3 143 3 23.1 7 17.1 17.1Stumpage 140 10 35.7 120 6 46.2 16 39.0 56.1Roundwood 68 9 32.1 15 3 23.1 12 29.3 85.4Lumber 42 5 17.9 12 1 7.7 6 14.6 100.0

Total 290 28 100.0 147 13 100.0 41 100.0

Source: Survey data

13 are from Michoacan and 28 from Durango. The data in this report refer to these 41.

3.3 Instrument development

The survey instrument is based on earlier work in Oaxaca, Mexico on mapping ownershipand control of forestry production in communal timber areas (Antinori 2000; Antinori andRausser 2008). The present survey maintains core questions from that work on theinstitutional development of community forestry and contracting with downstream buyersand adds questions about internal decisionmaking processes and governance.

3.4 Survey protocol

The procedure for administering a survey to a community included first seekingintroductions to community authorities. They were presented with a introductory letterexplaining briefly the project and contact information. The survey was to be conductedwith at least three members of the community present, including the CBC. The survey is acommunity-level survey and is administered to the current CBC as the recognized head ofthe community responsible for such matters, though anyone from the community couldrespond to the questions during the survey. All answers are treated as confidential.

viability”. Foresters use a rule of thumb, which may vary from state to state, that considers a managementplan feasible if the area has a tree species density of at least 40 cubic meters on average. The average forpine for communities in the population frame is 64 cubic meters per hectare and 15 cubic meters per hectarefor oak.

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3.5 Pretests

A series of three pretests refined the survey instrument and protocol. The first pretest wasconducted in three communities in Durango during November 2004, including a stumpage,roundwood and lumber community. This was followed by a survey training seminar amongenumerators and research team members in Mexico City at the Survey Design Center atUNAM. The second round of pretests in two communities, a stumpage and roundwoodcommunity, was then held in Michoacan in late November/December 2004. The third andfinal pretest was conducted in Michoacan in August 2005 in two communities, a no-saleand lumber (which was later recategorized as a roundwood). At the end of this process, theteam edited and produced a final draft of the survey instrument. This final pretest placedthe length of time necessary to administer the survey as between three to four hours onaverage.

3.6 Use of previously collected data

In addition to the survey instrument collecting original data, we also supplementedcommunity-level information with INEGI 1990 and 2000 Census data on population,demographics, employment, education and standard of living. The measures on materialgoods, housing materials and cooking fuel have frequently been used as poverty or incomeindicators and we will employ them in a similar manner. To supplement resource data, wecollected measures on topography, general vegetation coverage, altitude, annual averagerainfall and temperature. Finally, foresters for each of the communities provided data onlevels of actual harvest volume, in contrast to the data on authorized volume available fromthe SEMARNAT database.

3.7 Follow-up verification

All the data was checked by the enumerators and then by another reviewer to identify andclarify any inconsistencies or missing information in the survey. As necessary, follow-upvisits were made wherever possible, or phone calls directly to community members whowere present at the survey interview or to other informants to verify the information.

A formalized effort was made to determine the quality of the survey responses withfollow-up case studies conducted by a masters student at the University of California. Fourcommunities were chosen from the survey sample based on internal organization forproduction, so that community-level, work groups and individually-organized forestryoperations were represented. The case studies served various purposes. First was to reviewthe original survey with community residents and authorities for approximately a week,thus allowing ample time for reviewing the original survey responses from severalperspectives and giving a barometer of how well the original survey responses, often

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collected in a one-day visit, reflected “reality” as seen after a longer stay and widerdiscussions. Second was to amplify our information on how motivations and impacts variedregarding the allocation of forestry benefits under the different organizational types. Theinterviews targeted a heterogeneous set of community residents (e.g., official members,nonmembers, men, women, young, old) who might be affected by frest managmentdecisions in various ways.

The follow-up case studies verified that much of the original survey data was correct. Oneexception was that one community classified as a work group community actuallyrepresents a historical anomaly where the state combined several separate villages into oneindigenous community for purposes of titling as an agrarian community. Each village, nowcalled barrio, has a separately identifiable forest and makes its own decisions aboutharvesting, so this community’s organizational mode is reclassified as “other”. The majorcontribution of the case studies (reported in Fransen (2008) and Antinori and Fransen(2008)) are the detailed conversations and contextual analysis that elucidate the dynamicsof the institutional innovations represented in the larger survey sample.

4 Profile Data

4.1 Community characteristics

The following basic characteristics provide an overall profile of the community and generateindicators frequently used to test hypotheses concerning governance and collective action.The first subsection on land settlement captures the length of time the current communitypopulation has been in the area. Land and forest size gives information on resourceavailability. Proximity to population centers suggests measures of the degree of generalmarket integration of the community, possible transport costs and opportunity costs ofemployment. The subsection on sources of income extend the data in this regard. Thedemographics subsection details characteristics of the population. The remaining sectionssummarize secondary data on literacy and education to create various measures ofwell-being. Many measures of poverty alleviation and well-being exist and go beyondmaterial wealth, such as security and cultural identity (Alkire 2007). Our survey is limitedto a combination of literacy, education, material wealth and social network information asindicators of poverty alleviation and well-being, recognizing that these indicators captureonly facets of economic and social development.

4.1.1 Settlement

Post-colonial legal sanctification of Mexican agrarian communities came much later thanthe actual settlements. Comunidades indigenas and ejidos are two official categories of

30

communities which fall under current agrarian law, the law that applies specifically to thissector of society. Members of comunidades have provided proof that they existed as asettlement prior to the revolution. Therefore, many comunidades have indigenous originsand are often called comunidades indigenas . Members of ejidos have come together topetition for a title to a specified land area, though this group of people may not have beenliving in the same locale for any length of time. Our sample includes nine comunidades and32 ejidos . Twenty percent of the total number have populated their current location formore than 100 years. The formal titling process for recognition as ejido or comunidadbegan slowly after the revolution and picked up its pace in the thirties (Barnes 2009). Themean year for receiving formal status and land titles as an agrarian community is 1959,with little difference for ejidos and comunidades .

4.1.2 Land and forest area

The forestry permits provide us with data on land areas and forested areas. In our sample,the no-sale and lumber groups have the largest land areas; however, average forestlandincreases with vertical integration (Table 8). The difference in average forest hectares isnot statistically significant between any of the groups in this sample, in contrast to thesame test applied to the full permit database covering ten states (n=2912)12 which shows asignificant difference in average forested hectares between each group (Table 4). Therefore,we cannot reject the relationship between scale effects and vertical integration in largersamples.

Durango has a larger land area and forested land area per community on average than theMichoacan communities but the forest to total land ratio patterns are distinct withincreasing vertical integration. Overall, the increases between the no-sale and the stumpagecommunities and the stumpage and roundwood communities tested significant, but notbetween the roundwood and lumber communities. This pattern of significance is repeatedwith the Durango communities only. In Michoacan, the differences between the no-sale andstumpage communities and the stumpage and roundwood communities is statisticallyinsignificant, while the difference between the roundwood and the (one) lumber communityis significant. Therefore, for the majority of the sample, the forest to total land area doesnot correlate strongly with the switch from extraction activities to sawmilling, a result atodds with expectation that a much larger scale forest is needed to sustain own millingoperations. Using the population frame data (n=2912), the forest-land ratio differences aresignificant between the no-sale and the stumpage group (1% level) and the roundwood andthe lumber communities (10% level), but not between the stumpage and roundwoodcommunities (Table 4). Therefore, future work on the predictors for greater value-addedactivities should look into further details of the forest size and value-added relationship andconsider regional differences.

12Test includes communities with over 300 hectares and type identifiable.

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Table 8: Land and Forest Area

Total area (ha.) Forest area (ha.) Forest/land ratio

DurangoNo sale (n=3) 17654 2612 0.22Stumpage (n=11) 8686 5881 0.66*Roundwood (n=9) 8570 7980 0.86*Lumber (n=5) 15679 13676 0.86Total (n=28) 10894 7661 0.71

MichoacanNo sale (n=3) 2197 1483 0.58Stumpage (n=6) 3352 1743 0.65Roundwood (n=3) 778 568 0.78Lumber (n=1) 3524 1950 0.55*Total (n=13) 2505 1428 0.66

TotalNo sale (n=6) 9926 2048 0.40Stumpage (n=17) 6803 4330 0.66*Roundwood (n=12) 6622 6128 0.84*Lumber (n=6) 13820 11722 0.81Total (n=41) 8234 5636 0.70

Source: Survey data.

* = sig. diff. from group above.

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4.1.3 Demographics

Demographic data captures measures of heterogeneity and and population size that mayaffect measures of social cohesion and a group’s overall ability to coordinate collectiveaction. Although population size has ambiguous affects on deforestation (Angelsen andKaimowitz 1999), it is one of the most widely used indicators. Olson’s hypothesis is thatcollective action becomes more difficult as population size becomes “too large”. For thesereasons, population size and other demographic data are important measures. Both thesurvey instrument and INEGI data provided the data on population size. Where therewere large discrepancies between the two sources, the data is not included in the summarytable.13

The no-sale communities have the largest average population size, followed by thestumpage group. The lowest population size is the roundwood group. The resultcorresponds to Olson’s hypothesis that larger size discourages collective action (Table 9).However, noting that the stumpage group has the closest proximity on average topopulation centers, other factors may be in play (Table 10). Proximity to populationcenters offers employment and therefore raises opportunity costs and lowers severaltransaction costs such as search, information and transportation. Previous study foundevidence suggesting that proximity lowers specificity of investments in timber, thus raisingthe probability of outside contracting for production services (Antinori and Rausser 2008).Further analysis will shed light on the relative importance of these effects.

Some support for the idea of social cohesion as a unifying force is given by the percentageof families whose household head is an official community member ejidatario or comunerowhere the no-sale group has the lowest average. The nonmember families includeposesionarios and avecindados , many of whom are related to community members.14

However, all communities have 60% or more of their official members as residents, with thelumber group and, surprisingly, the no-sale group, reporting the highest averagepercentages.

We have wide variations between the two states in population patterns. Using availabledata from INEGI, Duranguense communities have much smaller population sizes thanMichoacan communities. Notably, overall population sizes are shrinking in the Durangocommunities, with only the stumpage group showing positive population growth.Michoacan has a positive average growth rate except for the two roundwood communities(one observation dropped for lack of population data). Ejidatarios/comuneros also makeup less of the local resident population in Durango than in Michoacan (data not shown).

13INEGI 2000 population data organizes information by localities rather than communities. Therefore, wenoted all localities within a community during the survey process and then added the count data for eachcommunity. Data reported in percentages were then recalculated using these new totals.

14Posesionarios live in the community with a plot for the house and an agricultural parcel. They aretypically children of ejidatarios but lack voting rights in the General Assembly. Avecindados live in thecommunity with a plot only for the house and do not have voting rights.

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Table 9: Population and Population Change

Mean, 2000 Change 1990-2000 (%)

Durango Michoacan Total Durango Michoacan TotalNo-sale 395 2019 1207 -12 52 20Stumpage 217 2368 889 9 21 13Roundwood 181 368 214 -32 -16 -29Lumber 243 3571 798 -26 20 -18

Total 229 2018 734 -13 23 -3

Source: INEGI

The lower section of Table 10 presents results according to whether the community hasresidents who speak the local indigenous language (e.g. Purepecha, Tarahumara, Huichol,Tepehuano). The presence of indigenous language speakers does not distinguish whether acommunity is titled as an ejido or an indigenous community comunidad, as our statisticaltest of this relationship resulted in an insignificant statistic. This fact may underscore thegreat dispersal of indigenous language speakers across Mexico and also quirks of titling,where the denomination of ejido or comunidad was pursued based on otherconsiderations.15 About half of the communities have indigenous language speakers. Theactual percentages within each community as reported are relatively small, about 2%, anddecrease with advancement along the timber production chain, with the no-sale grouphaving 6% indigenous language speakers on average. Yet, the indigenous language-speakingare (statistically) significantly larger in population size and have less members as a percentof their overall population while the percentages of members actually residing in thecommunity are relatively the same. The results may indicate that communities withindigenous language speakers represent older settlements which tend to have children of theofficial members residing in the village as well, as compared to the non-native speakingcommunities.

Other comparisons of differences by indigenous language speakers also give results contraryto much prevailing perceptions. The proximity to centers of population (500 residents ormore) is not significantly different, so that presence of native language speakers does notcorrespond to remoteness. Furthermore, there is no significant correlation between nativelanguage speaking capabilities and vertical integration, so that the basis of collective actionfor forestry activities goes beyond the cultural bonds of language as measured.

15Informants anecdotally told us that titling procedures for ejido status were less onerous than for comu-nidades indigenas.

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Table 10: Population Characteristics (average)

Hrs. topop.

Avg. total Forest ha. Members Residentmembers

center residents permember

(%residents)

(%members)

Vertical integrationNo-sale 0.90 1207 36 50% 77%Stumpage 0.48 889 72 76% 62%Roundwood 0.68 214 101 70% 68%Lumber 0.93 798 98 70% 72%

Indigenous speakingNo (n=22) 0.79 203* 89 77%* 63%Yes (n=19) 0.57 1049* 78 63%* 68%

Source: Survey data, INEGI.

*difference sig. at 10% or better.

4.1.4 Proximity to population centers

Two types of indicators approximate distance to population centers: 1) hours to statecapital (including transportation means necessary) and 2) hours to any other populationcenter of 500 people or more. There is a nonlinear pattern for distance to populationcenters, with the no-sale and the lumber groups the farthest, followed by the roundwoodand, finally, the stumpage group on average closest to population centers. The pattern isslightly switched for distance to the capital city, with the lumber and no-sale groupsfarthest and the stumpage and roundwood groups closest. The result is consistent with aninterpretation that greater distance from population centers increases the contractualhazards of timber marketing as well as decreases opportunity costs for those farther away.For those able to commercialize their forest, these factors argue for own production(Antinori and Rausser 2008).

4.1.5 Sources of income

Table 11 displays sources of income from local or regional sources, where the responses aregiven as percent of families regularly receiving income from that source in the last yearbefore the survey was administered. Sixty percent or more of families in communities withforestry operations receive income from forestry. In the communities with forestryoperations, private businesses which buy community wood. Among the forestry productioncategories, the lumber group has significantly smaller percentage of families who engage inthis type of business, presumably because that business is dominated at a collective level.

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The stumpage group shows the greatest frequency of private income from businesses, bothforestry and non-forestry, which are located either within the community or in anothertown (Columns 2, 3 and 4), possibly indicating higher opportunity costs of forestry thanthe other three groups.

Agriculture and livestock are the other main sources of income, with no significantdifferences across vertical integration groups. However, stumpage community membersmost often receive income from agriculture while the no-sale community families mostoften receive income from livestock. The latter finding may be worth closer analysis, aslivestock grazing may be associated with deforested areas. Closer proximity to towncenters (500 inhabitants or more) tends to be associated with more families engaged inagriculture, though the correlation coefficient is rather low (ρ = −0.27).

Nontimber forest products rarely generate income in this sample. The roundwoodcommunities report no families receiving income from nontimber products while stumpagecommunity families most often receive nontimber forest product income. The presence ofstores in the community, as separate from other types of local business, is most frequent inthe lumber and no-sale group. This data has been used as an indicator of a general level oflocal income in a community. Finally, the no-sale community commuters are statisticallysignificantly larger than those who commute to work from the forestry productioncommunities.

4.1.6 Literacy Rates

The INEGI literacy indicators include the percent of 6-14 year-olds who can read and writeSpanish and the percent of persons 15 and over who are “literate”. For the former,Table 12 shows that the percentages from the Census 2000 data start from a high base of78% across the four types of communities. Changes between 1990 and 2000 are positive forthe stumpage and lumber groups but negative for the no-sale and roundwood groups.Literacy rates in 2000 among 15+ year-olds are 83% and above across groups, thoughimprovements since 1990 are the lowest for the no-sale and roundwood groups. Therefore,in general, the no-sale and the roundwood groups have the lowest performance indicatorsfor literacy in this sample.

4.1.7 Material Well-Being

INEGI Census data and survey questions provide well being measures in terms of basichuman needs, like housing and access to health facilities, and wealth such as livestock andconsumption goods. Poverty, for example, has been frequently measured by the percent offamilies who use fuelwood as a primary cooking fuel. In this section, we show the averagetrends and correlations among these measures and vertical integration, as vertical

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Tab

le11:

Sou

rcesof

Incom

e(M

eanPercen

tof

Hou

sehold

s)

Forestry

Priv

-For

Priv

-Ext

Priv

-Int

NT

FP

Agri

Livesto

ckStores

Com

mute

Oth

er(1)

(2)(3)

(4)(5)

(6)(7)

(8)(9)

(10)N

o-sale(n=

6)0.00

0.001.00

0.370.33

16.6735.10

5.1749.17

0.55Stum

page(n=

17)62.97

6.344.86

0.508.77

30.6723.21

4.608.97

5.50R

oundwood

(n=12)

77.523.58

0.340.26

0.0011.35

29.934.55

18.290.00

Lum

ber(n=

6)79.00

0.401.20

0.401.40

10.8021.00

6.2016.17

0.00Total

(n=41)

60.233.83

2.520.40

3.9320.25

26.654.88

18.642.47

Source:Survey

data

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Table 12: Literacy Rates, 1990-2000 (Mean share of population)

6-14 yr. olds Change 15+ yr. olds Change2000 1990-2000 2000 1990-2000

No-sale 0.82 -0.05 0.83 0.06Stumpage 0.84 0.41 0.85 0.17Roundwood 0.78 -0.01 0.85 0.06Lumber 0.84 0.04 0.89 0.08Total 0.82 0.16 0.86 0.11

Source: INEGI 1990, 2000

integration may contribute to local economic development through investments,profit-sharing and jobs.

However, the data in this regard give an ambiguous picture of market participation’scontribution. Table 13 shows a select set of measures focused on household utilities andcooking fuel. While not all mean differences across groups are statistically significant (thebreak between stumpage and roundwood is significant for drainage), a general decline isapparent with increasing vertical integration in most measures. The last column representsan aggregated measure (average share of households with electricity, water, drainage or gasas primary cooking fuel) in which a statistically significant break occurs between thestumpage and roundwood group. Those communities based on agriculture (i.e. morefamilies reporting agriculture as a regular income source) are associated with less poverty(using cooking fuel as a poverty indicator, ρ = −0.51 for firewood).

By state, the difference is especially strong in Michoacan where the percent of householdsusing gas stoves as a primary fuel drops significantly (and reciprocally the percent who usefuelwood as primary cooking fuel rises) between the stumpage and roundwood groups.Otherwise, the confidence intervals are too large to register statistically significant results,though there are sharp drops in measures moving up the vertical integration chain. Thesame wellbeing measure calculated for the Oaxaca sample of timber-producingcommunities shows an opposite, increasing trend in material wealth with verticalintegration. Why do reverse patterns appear in the northern states? Is vertical integrationin Oaxaca contributing to greater local infrastructure development? Possibilities such asdifference in character of vertical integration and market relationships across regions willbe further explored.

The survey provides binary responses on other public services. Little statisticallysignificant variation across groups exists in having schools, internet, libraries, mail serviceand health clinics, though some frequencies decrease with vertical integration. We have anumber of survey measures on household wealth in terms of livestock and materials goods,like cars, telephones and house size. Rather than report individual measures, we look for

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Table 13: Household Utilities, 2000 (Mean share of population)

Electricity Water Drainage Gas Stoves CombinedTotal (n=37)

None 0.83 0.74 0.47 0.36 0.60Stumpage 0.71 0.72 0.30 0.18 0.48Roundwood 0.47 0.64 0.10 0.05 0.31Lumber 0.66 0.34 0.10 0.06 0.29Total 0.65 0.65 0.24 0.16 0.42

Durango (n=25)None 0.73 0.72 0.54 0.29 0.57Stumpage 0.59 0.67 0.11 0.01 0.35Roundwood 0.29 0.55 0.06 0.02 0.23Lumber 0.58 0.23 0.09 0.01 0.23Total 0.51 0.57 0.14 0.05 0.32

Michoacan (n=12)None 0.94 0.75 0.40 0.44 0.63Stumpage 0.96 0.81 0.68 0.52 0.74Roundwood 0.95 0.88 0.19 0.13 0.54Lumber 0.96 0.77 0.14 0.26 0.53Total 0.95 0.81 0.44 0.38 0.65

Oaxaca (n=43)Stumpage 0.90 0.68 0.14 0.07 0.45Roundwood 0.92 0.76 0.18 0.09 0.49Lumber 0.93 0.72 0.40 0.25 0.57Total 0.91 0.72 0.24 0.14 0.50

Sources: Survey data, INEGI 2000, Antinori (2000).

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patterns using principal component analysis and find that factors formed around havingthe following sets of assets: 1) sheep, 0-3 cows and 0-3 pigs, 2) over 50 cows and over 50chickens, and 3) car, cell phone, and a house with two levels and running water. Thefactors are scored to create an index of household wealth measures for each community.There is a strong correlation between the “material goods” factor and INEGI data onpercent of families using fuelwood, gas stoves and degree of economic marginalization forthat municipality. The same factor correlates negatively (ρ = -0.70) with fuelwood use,positively with gas stove use (ρ = 0.71) and negatively with higher degrees ofmarginalization (ρ = -0.21), as would be expected, showing some consistency betweensurvey and secondary, government-collected data. Furthermore, the material goods factordecreases as vertical integration increases. Those communities with more families involvedin agriculture correlate positively (ρ = 0.38) with material goods but (surprisingly)negatively with the first livestock factor (ρ = −0.31) and zero correlation with the secondlivestock factor, again associating agriculture with a wealth factor. The comparison withforest hectares per member is the mirror image to this, as it varies negatively with the first,small but diverse livestock factor (ρ = 0.43) and negatively with the material goods factor(ρ = −0.32), reflecting earlier correlations discussed above. Durango scores more poorly inmaterial goods, with a negative average scorings (principal components scorings can takepositive and negative values), while only the roundwood and lumber groups have anegative average in Michoacan.

4.2 Development of Community Forestry Institutions

For the communities which commercialize their forestland by selling stumpage, roundwoodor more processed material, the survey mapped institutional evolution and internalgovernance structure. Below is a brief historical overview of forestry activity in all thecommunities in the sample and, for communities which are currently selling their timberresources in some form, a description of their internal organization for forestrymanagement and production.

4.2.1 Market integration

The survey covers generally the last 50 years, based on recall of the community memberspresent at the survey interview. This includes a representation of both concessioned andnon-concessioned forests. Of the communities which currently commercialize their timberresources, about half in each category of stumpage, roundwood and lumber have been partof a concessioned area in the past, starting in 1950 and onward (with one communityreporting a concession which initiated in 1917). In addition, a little over half of all thecommunities in the sample (24 out of 41), including the no-sale group, have worked withprivate firms in the past. The earliest date is 1940, though occasionally community

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Figure 4: Oaxacan community-market participation, 1987-1997

Figure 5: Sample community-market participation, 1997-2007

interviewees indicated that forestry activities had occurred even earlier but could not recallspecific time periods.

The figures compare how the survey sample communities have changed their marketparticipation over time, first with the Oaxaca dataset and then with theDurango/Michoacan dataset for comparison. Granted that the time periods covered aredifferent, the comparison is still interesting. The Oaxaca communities show the verticalintegration profile by end product sold for the 42 community observations in 1987 and thenagain in 1997. The striking feature is that many forward integrated. The comparison withthe Durango and Michoacan communities, despite the time period differences of 1997 to2007, give a remarkably different pattern where there is much more de-integration. Manylumber communities de-integrated in the time period, so that the number of no-sale,stumpage and roundwood increased.

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Our previous analysis of the Oaxaca data used the incomplete contracts framework toexplain vertical integration in Oaxaca communities in 1997. As a formalization oftransaction cost theory, with some distinctions, we tested variables related to transactioncosts to explain the communities’ vertical integration. These variables included measures ofasset specificity, uncertainty and complexity of production processes as they relate totimber and nontimber goods, and conditions which would lover the costs of collectiveaction. The concept of uncertainty is interpreted to include control over jobs, monitoring,multiple forest uses, and diversification possibilities. The result is that a base level of forestendowment, while important, is not enough for a decision to integrate. Organizationalcapacity supported by a general consensus among community members about the value offorestry operations is also a significant element.

The same test is recreated in a preliminary fashion with the Durango and Michoacansample, and has strikingly different results. Similar variables applied to the new datasetare generally not explanatory. An ordered logit regression to explain levels of stumpage,roundwood and lumber (no-sale communities not included to maintain comparison withthe Oaxaca study) on the sample of the 35 communities from Durango and Michoacanrevealed no explanatory variables, including forest size and social capital indicators used inthe Oaxaca study. Only when we separated out the Durango communities (n=25) did onevariable become marginally significant. The roads variable representing pre-existinginfrastructure for harvesting (prior to community decision and expectation to participate inthe market) is significant and positive for the Durango communities, at the 10% level,indicating a capital constraint rather than a need for asset specific investments in Oaxaca.

What does this mean for the analysis and what conclusions can we draw from this, albeitpreliminary, analysis? We cannot say that we over-fitted the model in Oaxaca, as thevariables are chosen based on conventional transaction cost and production economicstheoretical predictions. Certainly, further research is warranted. One interpretation to beexplored further notes how political relationships and institutional structures evolved inforestry is vastly different from one region to another. It is possible that social andorganizational capital remain important but must have a different quantitative measure toreflect the different ways community institutions have evolved, which is a qualitativecharacteristic. Social and organizational capital may be measured differently acrossregions. One implication is that the transaction costs of timber production, processing andexchange may have been lowered by community forestry institutions or policy in the northsuch that communities do not find it worthwhile to forward integrate to control thenon-contractible benefits of production. If transaction costs are low, vertical integrationdoes not matter in capturing benefits. This interpretation seems unlikely in the complexenvironment in which forestry operate in Mexico. Therefore, follow-up research willcarefully examine the terms of trade for communities in the north versus the south.

The evolution of community market integration since the concession era also shows thateven for one community, the end product sold fluctuates, and not always in a forward,greater value-added manner. Table 14 shows communities’ movement up and down the

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production chain over time. Some of the more integrated communities started theirintroduction into the timber market by a sequential progression of selling stumpage andthen eventually integrating forward, while other more integrated communities havede-integrated for a period of time and then sold a more downstream product. The top partof the table indicates how many of the more integrated types have followed a sequentialintegration along the timber production chain. Most of the roundwood communities hadnever sold stumpage in the past but started off their own forestry activity by extracting thetimber themselves and selling roundwood. In contrast, the majority of lumber communitiesreport selling stumpage and roundwood in the past. Taking a more detailed look at ourhistorical data reveals interesting overlaps of production activities and strategies employedby the communities in accessing timber markets. Four of the twelve roundwoodcommunities at some point concurrently sold both stumpage and roundwood in the past,while only one still sells both stumpage and roundwood in the same cycle. Otherwise, allthe other roundwood communities jumped right into selling logs when they beganparticipating in the market. For the lumber communities, three of the five who soldstumpage in the past continue to sell stumpage concurrently with their lumber sales. Onlytwo of the six lumber communities did not sell stumpage concurrently and stopped sellingstumpage when they began to sell lumber. Comparing sales of roundwood and lumber, halfof the lumber communities sold roundwood before selling lumber; five of the six at somepoint sold roundwood concurrently with lumber; and half still sell roundwood along withlumber. Reasons could be that the community lumber operations do not have the capacity(physical or managerial) to process all the volume or classes of timber produced from thecommon forestland. Further analysis will yield more conclusive evidence.

The lower part of the table shows cases of the opposite movement, that is, going from amore forwardly integrated to a less forwardly integrated step in the timber productionchain. At least five of the no-sale group have sold stumpage in the past, showing that theymay be occasional timber sellers, possibly because their forestland is not large enough tosupport timber sales every year. Fourteen of the no-sale to roundwood communities havehad sawmills in the past which they no longer operate. Reasons for the switch in level ofoperations vary widely but the most frequent responses are issues with managementcapacity, re-organization, and having enough timber that year to sell or process. Oneinformant explained how the switch in end product sold year to year fits into a livelihoodstrategy. Referring to one community with a sawmill and machinery for secondaryproducts, the community has frequently switched from selling stumpage one year andselling processing material another depending on the need for cash. The processed materialpresumably yield about the same profits as selling stumpage, so that the decision dependedon the need for an anticipo or the advance payment that stumpage buyers will offer butnot buyers of processed material. If the anticipo is not needed that year by communitymembers, they will incur the upfront costs of salaries and other costs and process thetimber. We suspect that this strategy is used by other communities.

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Table 14: Integration and De-integration History

No-sale Stumpage Roundwood Lumber(6) (17) (12) (6)

Forwardly integratedSold stumpage in past - - 5 5Sold roundwood in past - - - 5

De-integrationSold stumpage in past (and now don’t) 5 - - -Sold roundwood in past (and now don’t) 2 4 - -Sold lumber in past (and now don’t) 1 6 7 -Sold secondary products in past (and now don’t) 0 3 2 1

Source: Survey data

4.2.2 Internal organization for timber production

Table 15 shows variation in production models across states. Levels of productionorganization found in the survey sample are community, work group and individual. Whilecommunity-level production organization is most common overall, work groups arestatistically more prevalent in Durango, while individual informal parcelization has astronger presence in Michoacan. Although the frequency of division decreases with greatervertical integration, there is no significant systematic variation. It is possible to encounterany variety of internal organizational mode for any given end product sold. Mean forestsize decreases as we move from community level, work group, then individualized systems,but the differences are significant only between the individualized systems and the othertwo systems. Except for a historically anomalous work group (see below), mean formationdate of work groups occurred after the 1992 Reform while most individual arrangementsformed prior to the 1992 Reform. Much of the subcommunity level forms of internalproduction organization are correlated with reports of “bad administration”(maldesempeno) in the past by the community administrators responsible for managing oroverseeing the forestry operations. The reasons given, in order of frequency, for subdivisionof production activities internally, for work groups, are errors in administration, lack ofconfidence in administration, internal conflict, and costs. The reasons in order of frequencyfor individualizing the production activities are historical pattern of individual access toforests (e.g. for resin), internal conflicts, costs and errors in administration. Therefore,work groups seems to be more the production mode of choice when the CBC or generalmanager does not fulfill their forestry duties to satisfaction. The specific survey modulesfor work groups and individual modes of production revealed the following summarypoints. Discontent with community administration motivates many to changeorganizational mode for forestry. Half have chosen to manage forest by the individualized

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system based on historical patterns of usage. Five out of eight “individualized”communities have followed that mode of production since before 1992 for forestry purposes.If a community chooses to split production activities, it is more likely to choose anindividualized parcel system if it had this system in the past for other non-commercialtimber forest products (e.g., resin). Otherwise, its chooses work groups. Finally, workgroups are chosen more if the split is due to maladministration.

To pursue the theme of internal accountability, all communities were asked what measureswere taken in cases of “maldesempeno”, or, in hypothetical cases where no specificmanagement errors were stated, what measures would be taken if the situation arose, mostsaid the individuals renounce their post. Fines are also used. Only in the hypotheticalcases did community respondents mention state or federal agencies for sanctioning. The“other” responses include withholding repartos until the debt was paid, or for a period oftime, not giving the person work, verbal reprimand, and in one case specifically,sub-division of the production activities.

The tendency to split is consistent with Fama and Jensen (1983)’s concept of separation ofownership and control, where the reorganization is an internal institutional response tomaking community managers more responsive to the community members. Splitting intosubcommunity-level groups makes the flow of funds more transparent by taking it out ofthe community authorities’ hands, and putting commercial exchanges and production moredirectly into community members’ hands.

The degree of formalization of these subgroups varies across communities, as would beexpected. Some work groups form along family lines, by convenience or simply around whopeople think can get the best terms of trade. Consequently, group size can change eachyear. Under individual harvesting, individuals are responsible for harvest and businessarrangements. Groups or individuals hire amongst the community for extraction. Forexample, one community with “individual” organization employed a total of ten chainsawoperators for about 50 community members in the last completed harvest prior to thesurvey. Sales proceeds go directly to each group member net of direct costs paid by groupleaders or to individuals. A few cases claim to have permanent parcels based on historical,individual access patterns for resin production, or a distinct constitutional history.Colonias for example were formed in the fifties by federal policies to encourage landsettlement and cattle ranching. In these cases, each founding member was allotted 50hectares, regardless of whether the land was agricultural or forest. In addition, our sampleincludes one community formally created from five previously distinct communities. Eachoriginal community, now called barrio, still considers itself more or less separate from theunified body so that each decides the manner of timber activities despite one overall forestmanagement plan.

The existence of these other forms poses a challenge to cross-scale linkages, say withforesters who must spend additional time coordinating with community members, andsecond-level organizations which seek representation from the community. While frequencyof membership in forestry associations (FA) is fairly evenly distributed among each

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Table 15: Internal Organization Systems

Community Work group IndividualN=26 N=5 N=10

StateDurango 21 4 3Michoacan 5 1 7χ2 prob. = 0.01

Mean formation date 1980 1998 1978

VI levelNo-sale 4 0 2Stumpage 11 1 5Roundwood 6 3 3Lumber 5 1 0χ2 prob. = 0.47

Mean forest hectares 7033 5854 2031chisq not sig b/w com and wgchisq sig b/w com and individchisq sig b/w wg and individ

FA membership 21 5 6Joined FA after current org. type 6 5 2χ2 prob. = 0.002

Past “maldesempeno” 8 4 7χ2 prob. = 0.01

Source: Survey data

46

organizational mode, all the work group communities formed work groups after joining theassociation. The work group form, as opposed to the individual mode, has beenproblematical in sending community representatives to association meetings (Taylor 2003).Most (80%) of both community-and individual-level harvesting production mode were inplace prior to joining the FA. This shows that individual forms of production do notcompete with the usual governance of common property activities in the communities,whereas work groups introduce additional layering of decisionmaking that is not completelyhierarchical to community-level governance.

4.2.3 Management

Overall, few communities have elaborated their governance system beyond the coreagrarian governance structure as defined in the Constitution to accommodate additionalforestry activities. The number of committees increases with vertical integration, showingmore division of labor; however, this distinction fades when we consider that most positionsare dually held by the CBC or JV, reducing the effective number of positions in thecommunity (statistically significant variation goes from 1% to 10% confidence level). Thisstructure is a practical choice by the communities but highlights the need for training andoutreach to cover business and ecological management skills. About 45% of thecommunities compensate the CBC and JV for their time. For all communities, the CBCand JV serve for 3 years.

Organizational structures can also include both internal and external actors to gainadditional expertise or act as oversight. Three (a no-sale, stumpage and a lumbercommunity) have a council of advisors apart from the regular cargo positions. The ConsejoForestal (CF), where they exist, follow the agrarian structure. They serve 3 years andreceive no payments. Only two, a stumpage and a lumber type, have caracterizados , thatis, respected members of the community, who act as overall advisors or counsels incommunity forestry matters. In neither case are they paid, and they have a more or lessindefinite post. These are outside the formal agrarian structure and arise from earliersystems of governance.

For the forestry activities, all the communities have designated Jefes de Monte (JM) whosefunction is primarily to oversee extraction. In all survey communities, the JMs aremembers of the community appointed by the CBC or CV and overseen by the CV or STF.The duration of their post varies from 1-3 years or for an indefinite period. About five wereunpaid positions, while the rest (nine) are paid either by the community or in one case bythe buyer.

The documenter, responsible for measuring wood volume extracted and transported, hasmore variation in supervision and pay. All but one are members of the community andappointed, for 1-3 years or for an indefinite period. They are supervised by the CBC, CV,STF, contractor, or parcelero or a combination of those. They obtained the post by

47

appointment by the community assembly, parcelero, work group, or contractor, and paid bythe community, buyer, work group or parcelero.

4.2.4 Decisionmaking

As illustrated in Figure 1, many levels and scales of governance shape forestry decisions.The administrative levels of governance are local, regional, national and supranationalwhile the rulemaking levels are constitutional, collective choice, and operational (Ostrom1990). The constitutional level sets the rules for the collective choice level, which in turnsets the rules for the operational level.16 For our purposes, relevant rules which have beenconstitutionally set at the national level are the agrarian structure itself which definesmembership, voting and responsibilities of elected officials. Resource use policies set at thenational level are, most importantly, the template for the forestry management plan andthe harvest permitting process. Local collective choices occur in the General Assemblywhere operational decisions may be delegated to elected or appointed officials like theCBC. Additionally, regional forestry associations may participate in forestrydecisionmaking, such as prices for material or labor.

What do the internal organizational modes of production which we label as community,work group and individualized mean in terms of who makes decisions? What role doexternal agents play, and for what decisions? To answer these questions, the survey has adetailed component which traces the decisionmaking process for several key decisions inforestry management. These decisions are the choice of buyer, exchange price, wage orreparto advances17 and volume harvested. The decisionmaking “processes” refer to whomakes the decisions, who authorized that person(s) or body to make those decisions, andwhat forms of oversight exist over those decisionmakers.

We followed the decisionmaking authority for a set of important decisions related toforestry operations made in each community. In many cases our internal organizationmodes correspond to a distinct decisionmaking pattern, although there are mixtures. Thepatterns do not correspond to vertical integration level except for the profit distributiondecision. Again, vertical integration typologies mask great internal variation inorganization and management. Only the harvest decision lack correlation with internalorganization and vertical integration, being mainly a technical decision laid out by theprestador de servicios tecnicos (PST). If we look at these decisions in detail, we seeoverlapping decisionmaking authority within each mode as well as across each mode. Let’stake the profit allocation decision as an example. Even though differences exist acrossmodes, there is still an element of the GA and CBC present, showing that community-levelauthority still plays a hierarchical, oversight role in many instances (Table 16).

16Other work (Ostrom 2005) includes a fourth level called the meta-constitutional level, which sets therules for the constitutional level.

17In cases where repartos or dividends are not distributed, we asked about the occurrence of wage advancesfor employed members of the community.

48

Table 16: Who is Authorized to Make the Profit Allocation Decision?

Production level Who decides Percent of responsesCommunity General Assembly 62%

CBC 33%Work groups General Assembly 60%

WG leader 40%WG assembly 40%

Parcels CBC 50%Parcel holder 50%

General Assembly 25%Source: Survey data.

Table 17: Vertical Integration v. Internal Organization Decisionmaking

Is the relationship statistically significant?Decision By internal

orgn.?By VI level?

Profit allocation Yes YesTrade price Yes NoWage/reparto advance Yes NoHarvest volume No NoChoice of buyer Yes NoSource: Survey data.

49

The results reveal extensive cross-scale interactions among government agencies, forestersand buyers, associations and local community members, both officials and generalmembers. One interesting finding is that decisionmaking patterns are distinguished not byvertical integration level but by organizational mode according to whether forestryactivities are organized at the community or sub-community level (Table 17). Consistentwith economic organizational theory (Fama and Jensen 1983), decisionmaking powersfollow the governance structure. Take for example the question of who is authorized tomake decisions about the distribution of revenues from forestry sales. Most of thecommunities which fully manage and operate collectively report that the General Assembly(GA) makes this decision. In those which operate in a parcelized fashion or in work groups,the flow of funds is handled by the work group leaders or the individual parcel holders.Neither does the CBC become involved in this decision, though he is in a severalcommunity-level operations. However, this mode of organization implies a collective choiceand an operational choice. The GA initially approved the decision to allow production atthe sub-community level, implicitly allowing the change in decisionmaking responsibilitieswhich goes with that particular production model. One may also say that the GAconstitutionally had the choice to make a collective decision to change their internalpractices.

Likewise, the GA and CBC have the responsibility of negotiating a sales price with buyersin collectively-managed communities while parcel holders or group leaders make thedecision in these divided communities. Yet, even in communities with divided productionprocesses, there is a variation in decisionmakers. The work group communities vary theirresponses among the CBC, PST, work group chief (Jefe de Grupo), and the work groupassembly (Asamblea de Grupo) as actors in authorizing sale prices. In the individual parcelcases, the GA is also noted with frequency. Even though these subgroups are responsiblefor harvesting their allotments, some of these subgroups still coordinate as a community inagreeing to prices or in making agreements with buyers.

Advances on wages or repartos are part of the livelihood strategy associated withcommunity forestry (Wilshusen 2003). The CBC, rather than the GA, is more oftenresponsible for authorizing advances in collectively managed communities, though the GAwas the second most frequent response. In several instances, interviewees explained thatthe CBC has to clear or report the advance in GA meetings. Among the five work groupcommunities, both the Jefe de Grupo and the CBC are mentioned as decisionmakers forthis decision. Finally, parceleros deal directly with buyers to arrange advances. In oneexample of the interaction, the buyer might discuss a request for an advance with the CBC,presumably to gain more information on the individual and make the accountingconsistent. The buyer then deducts the advance at the end of the payment cycle from anyrepartos or wages (say, in stumpage communities) owed to that individual.

Most communities regardless of internal management system said that the PST isresponsible for authorizing harvest levels, as per state mandated rules and the requirementof a management plan. However, some communities noted that the GA (or work group

50

leader or parcelero) also has a role in authorizing the harvest, either in approving the planor adjusting the harvest to less than the total allowable cut.

In collectively-managed operations, the General Assembly is most often the locus ofchoosing a buyer. Buyers make a proposal and the GA votes whether to accept the bid.The CBC is noted in a few cases along with the GA as decisionmakers. During interviews,community authorities often responded to this question in terms of final decisionmakingwhich does not preclude the role of the CBC or another actor, like the PST, in bringing thebuyer to the GA forum. In work groups, the work group leader is directly responsible forchoosing a buyer, while the individual parcel holders choose under the temporary parcelsystem. The PST is least involved in this phase, and many PSTs in follow-up interviewsconfirmed that they are mostly not part of this process.

A question is whether any one decisionmaking model provides more accountability andmore equal distribution of benefits. This question is explored in the section below ondistribution of benefits. In addition, Antinori and Fransen (2008) indicate that economicand environmental impacts in these “decentralized” communities are not systematicallyworse. The impact depends on the performance measure in question (Fransen 2008;Antinori and Fransen 2008). Theory suggests that as long as decisionmaking powers arebalanced by a form of control mechanisms over the decisionmakers, decisions that areresponsive to membership needs can be made. Production at the work group or individuallevel does not completely relieve the subgroup from community responsibilities. Almost allof the individually organized production operations pay some form of retribution to thecommunity. In work groups it is less clear, though a portion may be allotted on a regularbasis to the local school. Preliminary empirical tests reveal lack of strong correlationsbetween organizational forms and outcomes. Further research will clarify results.

The community members are generally protective of their claim to forest resources. Themost common answers to whether people monitor their peers taking resources from theforest are “always” and “often”. Most said that it would be probable or very probable thatsomeone would denounce another if they observed a rule violation. Table 18 shows thatthere is some tendency for more integrated and community-organized productioncommunities to report amongst themselves. In cases where they said that someone wouldprobably not report a violation, the reasons given were fear of doing so or an expectedempty response where nothing would happen.

4.2.5 Associations and NGOs

Relative to other regions in Mexico (for example, Oaxaca), few nongovernmentalorganizations (NGOs) operate in this sample (only 2 out of the 41), despite these state’simportance to forestry resources. Michoacan is home to the Monarch Reserve and otherecological attractions, while Durango is one of the top timber producing states in Mexico.

On the other hand, forestry associations (FAs) have a rich history in Mexico and have

51

Tab

le18

:Pee

rM

onit

orin

g

Mon

itor

ing

Rep

orti

ngP

roba

bilit

y

VI

leve

lA

lway

sO

ften

Som

etim

esR

arel

yN

ever

Ver

yG

ood

50-5

0U

nlik

ely

Not

No-

sale

12

11

00

31

01

Stum

page

46

22

38

41

22

Rou

ndw

ood

64

01

08

10

20

Lum

ber

30

21

00

40

11

Inte

rnal

orga

niz

atio

nC

omm

unity

89

54

012

92

12

Wor

kgr

oup

31

00

13

00

20

Indi

vidu

al3

20

12

13

02

2For

estr

yas

soci

atio

nN

onm

embe

r5

31

11

34

02

2M

embe

r9

94

42

138

23

2Tot

al14

125

53

1612

25

4So

urce

:Su

rvey

data

52

played a major role in shaping the community forestry sector. The associations in thesample include technical associations to share forestry services, political associations,production cooperatives and the Unidades de Manejo Forestales (UMAFORs) recentlycreated by CONAFOR. Antinori and Garcia-Lopez (2008) provide a detailed analysis andhistorical background of these associations using the survey data. Here we note the mainpoints.

Affiliation with a forest association is predominant across the sample. Out of 41, 32belonged to some type of union of forest ejidos , with membership probability rising withvertical integration (Table 19). Durango counts with significantly more instances ofassociations membership than Michoacan.

Since the historical motivations leading to the creation of forestry associations includescomplex relationships between the state and the agrarian sector, a continuing line ofanalysis is how political movements differed across regions and the impact on servicesoffered by FAs.18 Of the 32 FAs identified in the current sample, thirteen are products ofcommunity effort as opposed to top-down formation (Table 20). These bottoms-uporganizations show no significant difference in frequency across states. Historicalassociational networks matter as well. All of those who reported being members of a pastforestry association dedicated to counteracting detrimental parastatal practices are nowmembers of a forestry association. In addition, such history is significantly related to beingin a bottoms-up organization now.

We tested the impact of association membership against various environmental andeconomic indicators. The differences are somewhat less than expected, though the analysisis preliminary. For example, those who are members in an association that providesmarketing services do not always receive a price premium for their product. Those in anassociation providing environmental training or services do not necessarily exhibit “better”forestry management practices. However, association membership has a positive impact onreinvestment in forestry and some public goods (Antinori and Garcia-Lopez 2008). Inaddition to these impacts, further study includes an assessment of how associationmembership is integrated into the community decisionmaking processes.

4.3 Production

The survey covered many details of production, including harvest levels authorized and cutby species, labor and capital and forestry services. We present only a snapshot of the data.

18For example, in the Oaxaca study, less than half of the sample (13 out of 44) communities belonged toa forestry association, where membership significantly increases with vertical integration.

53

Table 19: Forestry Association Membership

Nonmembers Members Totaln=9 n=32 n=41

Avg. forest ha. 1123 6946 5636SE (262) (1358) (1124)

Parastatal-era assoc.* 0 13 13chi2 prob. = 0.02

Source: Survey data

Table 20: Origin of Forestry Association

AssociationMembership

Bottom-up Top down

n=32 n=13 n=19

StateDurango 26 (93%) 12 14Michoacan 6 (46% 1 5chi2 prob. = 0.001

VI levelNo-sale 2 (33%)Stumpage 14 (82%)Roundwood 10 (83%)Lumber 6 (100%)chi2 prob. = 0.03

Parastatal-era FA membership 13 8 5chi2 prob. = 0.01

Source: Survey data

54

4.3.1 Volume

In an earlier phase of the project, the permit data from the ten states showed a decliningtrend in authorized volume for pine species, the most important of commercial species inMexico. Figure 6 displays the average volume against the total number of permits tocommunity territories. The decline is steady since 1991. In the same period, the number ofpermits have increased, reaching a peak in 2001, and then decreased. Even if we considerthat more permits may have been issued after we collected the data around 2005, thedecline in average authorized pine volume is still apparent. One possibility is that initiallylarge communities apply for a permit, while communities with smaller forest resourcesorganize more slowly.

100

500

900

N

3500

5500

7500

9500

Mean

1990 1995 2000 2005 2010Year...

Source: National Survey of Community Forests

1990−2010

Average Authorized Volume (cm), Pine

Figure 6: Timber authorizations, 1990-2010 (m3s of pine)

How do the sample communities compare with the overall trend? Table 21 showsauthorized volumes from the permit database for the years 2000 and 2005. Fewcommunities in the database had matching data for both years, so the percent changesshow changes in overall group averages.19 The 41 sample communities reflect the trends forthe rest of the communities in their state by vertical integration group, except for theDurango stumpage communities which had a slight increase in authorized volume onaverage in contrast to the decrease among the sample stumpage communities, and the largeoverall increase for Michoacan lumber communities in contrast to the one sampleobservation for this group. Otherwise, the sample communities reflect the decreasing trendin authorized volumes.

Comparing the authorized versus the actually harvested levels in the sample, all averagesare somewhat less than the authorized levels except for the roundwood group in Michoacan.If we focus on group averages (where more than one observation point is available), we findthat Durango on average comes closer to harvesting 100% of its authorized volume eachyear than Michoacan. All the Durango averages are above 90% of the authorized amount.

19The Phase 1 typological classification is maintained for the sample communities for consistency even ifthe community was later classified as a different type.

55

Table 21: Average Authorized Pine (m3) for Durango and Michoacan: All v. Sample Com-munities

Durango MichoacanStumpage Roundwood Lumber Stumpage Roundwood Lumber

2000-AllN 73 60 29 85 14 9Mean 4638 4769 18326 1708 1779 9994sd 5031 4318 23810 1464 1870 206632005-AllN 46 39 24 69 13 7Mean 4824 3865 16930 1084 1681 13601Sd 3950 2700 22005 1187 1646 24199Change 4% -20% -35% -36% -6% 36%

2000-sampleN 8 10 6 3 3 2Mean 4913 3331 11886 3072 938 608sd 4048 4095 9209 1652 324 3082005-sampleN 7 6 5 3 3 1Mean 3341 2069 10198 1531 862 329Sd 2936 1253 8172 1176 377 –Change -32% -38% -14% -50% -8% -46%

Source: Phase 1 permit data.

56

As a group, the roundwood harvest the highest percentage of allowable cut than the othergroups. Where the volume actually cut was less than 100% of the allowable level,communities across groups tended to state lack of demand and lack of commercial wood -implying that not all of their harvestable wood was commercially desirable - as reasons.The stumpage group tend to state lack of demand, while the lumber group gave bothreasons. In considering trends in harvest levels, most communities thought they would onlybe able to harvest less timber in the future, consistent with the declining production trend.

4.3.2 Prices

The price at which products are exchanged are an agreement between the buyers andsellers. Considering that various governance characteristics might improve the bargainingpower of the communities, we compare the deviation from the mean price for the productsold. For example, we might expect more highly integrated communities to have moremarket information and flexibility in contracting and therefore to have better prices fortheir products. Likewise, communities selling their timber by subgroups may be expectedto receive better prices if the division sought to improve management operations andachieve more flexibility in contracting. A measure was created by calculating the differencebetween either the community’s stumpage or roundwood price per cubic meter and theaverage for that category of product. The more integrated communities and thecommunities that produce by subgroup levels have higher averages, that is, pricepremiums. However, we found that among this dataset, the variances in prices are so widethat the differences in means between integration levels or form of organization are notstatistically significant. Other factors must also be considered in explaining pricedifferences, such as location and specific contract agreements.

4.3.3 Employment

One of the benefits cited for community forestry is access to local employmentopportunities. Indeed, one of the sticking points causing resistance to parastatals was thepractice of hiring more experienced workers from distant locations outside the communityrather than hiring and training locally for all except the most basic of tasks. Our data onemployment refers to the last harvest season before the survey to ground the responses inactual occurrences. Table 22 shows total employment by occupation. Technical work refersto taking inventories, clearing brush to prevent fires and other silvicultural treatments, andmarking trees for the next harvest. The sum excludes the professional forester, which isgenerally one professional per community. Reforestation refers to workers hired to replanttrees and tend to nurseries. This category is the largest as various government programsmandate and fund reforestation in communities. Large groups are sometimes organized tocarry out re-planting projects. While some of this work is paid, it should be noted that acommunity might organize a particular reforestation effort as a tequio/faena, or community

57

Table 22: Total Employment by Occupation

Occupation Sum (n=41)

Technical 578Reforestation 947Logging 793Milling 264

Total 2582

service project, which is unpaid but counts towards members fulfilling their duties to thecommunity. Logging refers to loggers, their assistants, transport of timber, road work tomaintain or create logging roads. Finally, milling, the smallest category, refers to work insawmills and with other equipment to produce secondary products. The data does notinclude the managerial team, either as specified under the Usos y Costumbres practices(e.g. the CBC and JV) or those selected to manage forestry activities (e.g. JM, Jefe dePatio, Jefe de Aserradero).

Figure 7 compares average local as compared to total employment across verticalintegration levels and forest size. Surprisingly, the no-sale group has as much employmenton average as does the stumpage group, and all employment is local, whereas the stumpagegroup has the largest gap between average local and total employment. Outside contractorstend to hire from outside the community more often, explaining this gap. The roundwoodgroup hires almost all workers from the local population, while the lumber group, with thenhighest average local and total workers, has a lower percentage of local workers on average,possibly due to the increased specialization and expertise required on some machinery.

By size of forest, the smallest size strata has the largest average local and total, due to thelarge reforestation efforts in this group. Beyond this strata, employment on averageincreases with size of the forest.

4.3.4 Financing forestry activities

Only seven of the forty-one communities sampled received credit from commercial banks orgovernment rural development banks ata anytime in the past. Where credit was obtained,funds were applied mainly to working capital and machinery. For example, one communityreceived credit to purchase a crane (grua), two received credit to purchase sawmillequipment, and one for “other” type of machinery. Of these seven, some have receivedcredit more than once. Low reliance on credit markets is consistent with the Oaxaca study,where only three communities used bank credit in the five years previous to the survey (in2000) and all credit funds were applied to physical equipment (Antinori 2000).

58

Figure 7: Total employment by forest size and vertical integration

For technical services, 32 out of 33 responses said the community paid for all or part of themanagement plan, with 18 responses receiving assistance from SEMARNAT orCONAFOR. On average, communities pay 65% of the cost of the management plan.

Government programs have tended to emphasize public goods and human capital and lessphysical or working capital needs of production. The main forestry-related programs andtheir main focus are listed in Table 23. Most programs are administered by CONAFOR.20

The major programs in the past, PRODEFOR and PROCYMAF, plus PRONARE andPRODEPLAN, were reorganized under a single program known as PROARBOL in 2008.However, each individual program had been active in the time leading up to the surveys,and of course, in the past. PRODEFOR funded about 6500 projects among the permitholders captured in the Phase 1 database for ten Mexican states. About 4000 of thoseprojects are for management, mainly thinnings, fire prevention, and management plans.21

Consequently, all except five communities in the Durango/Michoacan sample have receivedassistance from a government program for primarily reforestation, fire prevention and othermanagement activities. Only three cited government assistance in acquiring machinery forsecondary processing.

20Sedesol, Sedena, Sagar, SEP and Semarnat are involved in PRONARE.21One community may account for more than one project, so less than 6500 different communities have

received funding.

59

Table 23: Forestry Programs at Time of SurveyProgram ObjectivePRONARE reforestationPROCYMAF institutional capacity, technical assistance, funding for

management plansPRODEPLAN plantation promotionPRODEFOR conservation, restoration and modernization of industrial

activities, technical supportPSAH Payment for environmental services

4.4 Measuring institutional impacts

In this subsection, we consider outcomes of interest - economic, social and environmentalimpacts - that are affected by the collective decisionmaking processes of communities as agroup, residents of the community and outside actors. The purpose is to developquantitative measures and analyze patterns as outcomes of quantitative and qualitativecharacteristics of the institutions under study, that is, the community forestry institutionsand the polices which implicate them. We continue to report statistics across communitytype, internal organization and association membership as factors of broad interest topolicymakers and researchers. When able, we report preliminary empirical tests of therelationship between the institutional characteristics and the outcomes of interest. Generalhypotheses that tend to arise in the literature and which we base our preliminary tests are:

• Greater vertical integration by the community leads to greater reinvestment intoforestry, more local public goods and better forestry management for conservationpurposes.

• Division of communities, even within production organization, leads to a decline inthese same outcomes.

• Membership in forestry associations (FAs) increases the frequency and level of thesesame measures.

Finally, we introduce a refinement of the institutional analysis according to size ofstakeholder group:

• For important decisions that have broad impact, the decisionmaking forum is morelikely to be the General Assembly. If not, then the outcomes as measured are less“desirable” from a societal point of view.

The following sections provide information for some insight into whether these expectationsmaintain in the data.

60

4.4.1 Investments in forest activities

Investments in forestry can have ambiguous individual effects depending on a person’srelationship to the community and the operations themselves. Workers through their wagesare more likely to benefit from reinvestments if the investment assures the continuedviability and employment capacity of forestry activities, unless the investment islabor-saving. We venture to assume that in community forestry operations, theinvestments in capital mainly allow the same or more labor to be hired. Nonworkercommunity members maintain access to benefits through reinvestment when theinvestments assure the continued operation and dividends (when disbursed). The benefit inthis case may be longer term and more uncertain, as the choice to disburse and the amountof dividends is decided upon yearly.

Survey questions asked whether any investments back into forestry operations had occurredin the last five years. Expenses characterized as reinvestment into forestry operationsinclude management plans, roads, trucks, cranes, tractors, secondary processing equipment,and investments in diversified activities. Table 24 summarizes the results in terms of howmany communities stated that they had made these investments in the last five years priorto the survey. The most frequent investments are in roads. Road investment tended tooccur on a yearly basis. The result coincides with the need to maintain and build roadseach year, as heavy rains and usage have eroded existing roads and new stands need to beaccessed. The second most frequent investment is the management plan. Communitiescontribute to the plan, which is necessary to obtain harvesting permits. Across verticalintegration levels, roundwood and lumber groups invested more often in secondaryprocessing and tractors, trucks and cranes. Across production organizational mode, thedistinction between community and work group modes is much less than the distinctionwith the individualized mode. That is, while community-level operations have morefrequency of investments in more categories than work-group communities, the difference isnot that great. For roads, all models seem comparable. The communities which aremembers of inter-community forestry associations, however, consistently invested moreacross all the categories of investment. In the last column, a dummy variable indicateswhether investment in any category occurred in the last five years. This dummy ispositively (pairwise) correlated with vertical integration and membership in a forestryassociation but negatively correlated with sub-community-level management, due mainlyto individualized systems. Finally, overall, no investments in market studies, scientificinventory equipment or management studies occurred, suggesting possible areas forimproving services to communities.

Table 25 shows where tendencies appeared stronger or were significant by a χ2-statistic(testing for statistically significant associations across columns and rows in a table). Weshow correlation coefficients greater than ρ = 0.20 across the institutional groupings and/ortheir χ2 where significant at a level better than 10%. Under these tests, more verticallyintegrated communities do tend to invest more often in management plans, roads,secondary processing and in general. Communities which organize production through

61

Table 24: Frequency of Forestry Investments

Share of communities

ForestStudy

Plan Roads Transport Secondary Diversify Anyinvest-

ment

Vertical IntegrationNo-sale 0.14 0.14 0.14 0.14 0.00 0.00 0.43Stumpage 0.00 0.38 0.31 0.00 0.06 0.19 0.62Roundwood 0.08 0.50 0.58 0.08 0.17 0.25 0.92Lumber 0.17 0.00 0.67 0.33 0.50 0.17 0.83

Internal OrganizationCommunity 0.12 0.38 0.46 0.15 0.19 0.19 0.81Work Group 0.00 0.40 0.40 0.00 0.20 0.20 0.80Individualized 0.00 0.10 0.30 0.00 0.00 0.10 0.40

Forestry associationsNonmembers 0.00 0.25 0.25 0.00 0.00 0.00 0.50Members 0.10 0.34 0.48 0.14 0.21 0.24 0.79

Total 0.07 0.32 0.41 0.10 0.15 0.17 0.71

Source: Survey data

62

Table 25: Forest Reinvestment - Statistical Correlations

Correlation coefficient (ρ) χ2 Prob.Vertical Integration Plan: – .04(levels=1-4) Roads: .41 .06

Secondary: .41 .04Any: .37 .06

Internal org. Transport: -.25 –(division=1) Any: -.29 .06Forestry associations Secondary: .26 .09(membership=1) Diversify: .29 .06

Any: .29 .06Source: Survey data.

sub-community groups invest less in transport equipment and overall. However, thistendency is due to the individualized mode, as the tendency disappears when testedagainst work group communities only. Those in forestry associations have some tendenciesto invest more in secondary processing, diversified forestry activities, and overall.

4.4.2 Local public goods

Reinvestment in local public goods differs from reinvestment in forestry because access tolocal public goods is more directly open to all residents of the community, not onlymembers or those engaged in timber production. Therefore, it represents another aspect ofdevelopment as a forestry activity outcome. As with reinvestment into forestry, a set ofsurvey questions explored the frequency and nature of public goods investments bycommunities in the last five years and the source of the funds. Table 26 summarizes thefrequency of investments as communities advance in vertical integration, by internalorganization and by FA membership (top, middle and bottom sections of table,respectively).

Across public goods, the greatest frequency of public investments went to schools, followedby churches, fiestas/ceremonies, and medical services or supplies (e.g. clinics), all corecommunity functionings. The no-sale communities funded these investments mainly bynonforestry communal funds. In the other vertical integration groups, public goods arefunded mainly by forestry revenues. It is a widespread custom to have the school count asan ejido/comunero member in the division of repartos each year, so that the school receivesthe equivalent of an individual member when forestry profits are disbursed. The no-salegroup tends not to invest churches, potable water or civic buildings; the stumpage grouptends to invest more often in medical supplies or services (as percentage of group); theroundwoods more frequently invested in churches and fiestas; and the lumber group moreoften invests in potable water and churches relative to other groups. By internal production

63

Table 26: Frequency of Local Public Goods Investments

Count

School Water Civicbldg.

Church Fiesta Medical Grants Pension Other

Vertical integrationNo-sale 2 0 0 0 1 1 0 0 2Stumpage 8 1 1 4 3 4 0 0 6Roundwood 11 0 1 4 3 1 0 0 2Lumber 5 2 1 3 1 1 0 0 0Total 26 3 3 11 8 7 0 0 10

Internal organizationCommunity 18 2 2 9 8 7 0 0 8Work group 4 1 1 1 0 0 0 0 1Individual 4 0 0 1 0 0 0 0 1Total 26 3 3 11 8 7 0 0 10Invest every year?Community 13 0 0 6 8 3 1 0 1Work group 3 0 0 0 0 0 0 0 0Individual 3 0 0 0 0 0 0 0 0Total 19 0 0 6 8 3 1 0 1

Forestry AssociationsNon-members 4 0 0 3 2 2 0 0 4Members 22 3 3 8 6 5 0 0 6Total 26 3 3 11 8 7 0 0 10

Source: Survey data

organization, public goods investments for the sub-community organized operations aremore restricted to schools and to some extent church. That is, public investment is morelimited to traditional contributions to church and school. Those in a forestry associationmore frequently invest in public goods across all the public goods categories.

To determine which relationships have statistical significance, Table 27 illustratestendencies with a correlation coefficient ρ > 0.20 and/or a χ2 probability better than 10%.More vertically integrated communities statistically invest more often in schools andpotable water, while those FA member communities more often invest in schools in astatistically significant way. Note that most public goods investments are funded byforestry revenues, despite FA membership, though grants may have eased ability to spendon public goods. For sub-community internal production modes, there are lessfiestas/ceremonies and medical supplies. A variable was constructed to record the range ofinvestments across the categories of public goods, with higher values indicating a broaderrange of investments. The calculations shows that the range of public goods investment ispositively correlated with vertical integration and negatively correlated with subcommunity

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Table 27: Local Public Goods - Statistical Correlations

Correlation coefficient (ρ) χ2 Prob.Vertical integration Schools: .42 .02

Potable water: .23 .05Church: .31 –Range: .21 –

Internal org. Church: -.23 –(division=1) Fiestas: -.37 .02

Medical: – .03Range: -.39 –

Forestry associations(membership=1) Schools: .40 .01Source: Survey data.

organization, though no significance by FA membership.

4.4.3 Profit-sharing

The dividends (repartos) paid out to community members may be one of few other sourceof income aside from government programs. Therefore, it is a critical factor in communitylife. All except three community-level organized communities report the practice of payingout dividends to individual members. All work groups paid out such dividends. Theresponses are somewhat ambiguous for the ten individually-parceled communities, as theterm reparto is mostly associated with disbursal of collective funds, whereas the individualparcel type of production sometimes bypasses the collective process and individuals arepaid directly. However, three definitively said they disbursed profits through the GA, CBCor otherwise, while one said they did not disburse profits, even though the decision is heldat the GA level.

Dividends vary across communities and within communities between years, depending onthe harvest year. In our sample, the dividends ranged from 1197-58,000 pesos. Those withforestry activities who report paying dividends do so each year. By vertical integrationtype, on average each member in a stumpage community receives 10,000 pesos; roundwood,30,000 pesos; and lumber, 21,000 pesos. By internal organization type, thecommunity-organized on average received 19,000 pesos in the last pay-out, thework-group-organized received 16,000 pesos and the individually-organized received 30,000pesos.

65

4.4.4 Protection of forest resources

A series of self-reported measures of environmental impacts includes practices widelybelieved to degrade environmental quality indicators and environmental quality conditions,such as measures taken to reduce erosion, soil and water contamination, to protect habitat,changes in water quality and forest cover, and conservation practices. Here we summarize asmall subset of the survey data. In many cases, we were able to supplement or corroborateresponses by third-party informants or indicators from the forestry management plan tocrosscheck our results. Ongoing work will further “sync” this information with surveyresults.

We first review a basic set of conservation practices which represent actions over whichindividuals and communities have a degree of control through the choices they make andwhich have direct impact on forest cover and quality of habitat. The practices are governedby the community or supported by both community and government conservationdecisions. For example, clandestine timber harvesting refers to collection of wood productsin certain areas and beyond a certain volume without a permit sanctioned by thegovernment office. Yet, this activity has also been historically monitored by localcommunity authorities and general residents themselves. Fire preparedness refers to abilityto respond to fires. As most communities have experienced fire danger over the years, theability depends on willingness to respond to fires anywhere in the community and effortscoordinated by local residents or federal authorities (Antinori and Rausser 2007).

Table 28 displays patterns in the propensity to follow a set of conservation practices byinstitutional or organizational characteristics. While the frequency of clandestine woodcollection - either for fuelwood or timber - declines with vertical integration, the differencesaccording to χ2 tests are not significant at convectional levels. However, the degree orseverity of the illegal collection activities, is significantly more in the less integratedcommunities. Furthermore, the incidence of illegal harvesting increases significantly withmore atomized organization of timber production and lack of membership in a forestryassociation, though the severity of illegal collecting does not vary significantly with thesegroupings. Most respondents described the source of the contraband harvesting asexternal, such as encroachment from a neighboring community, rather than internal actors.For all the other categories of conservation practices in the table, no major differencesexisted except for clearing forests by internal production mode. The individualizedproduction communities have significantly greater clearing of forests than the work groupor community-level organizational models. For fire preparedness, most communities statedthat their practices had worked fairly well to excellent. Additional data reveal that firebrigades and inspection tours are the most common forms of fire prevention, and someareas are monitored by SEMARNAT or inter-community fire towers. Also, communitieshold faenas , or voluntary civic duty among community members, for fire prevention (digtrenches, clear buffer zones, etc) between 1.1 and 2 times a year on average.

Questions on changes in water quality, forest cover and abundance of wildlife produced a

66

Tab

le28:

Con

servationP

ractices

Clan

destin

etim

ber

harvestin

gIllegal

NT

FP

Clearin

gFire

Prep

.

%yes

Origin

(Count)

Degree

(Mean)

%yes

(Mean)

(Mean)

VI

levelInternal

External

Both

0=low

0=low

1=low

3=high

4=high

5=excellent

No-sale

67%0

31

*2.0033%

0.674.00

Stumpage

29%1

22

*0.7624%

0.713.67

Roundw

ood25%

01

2*0.42

27%0.17

4.00Lum

ber17%

01

0*0.17

17%1.33

3.83In

ternal

organization

Com

munity

*19%0

41

0.5023%

*0.463.90

Work

group*40%

00

20.80

60%*0.40

4.00Individual

*60%1

32

1.4011%

*1.203.57

Forestry

association

Nonm

embers

*50%1

32

1.338%

0.673.88

Mem

bers*24%

04

30.52

32%0.62

3.84Total

32%1

75

0.7625%

0.633.85

Source:Survey

data*

=sig.

diff.over

group.

67

range of answers among the sample.22 Neither vertical integration or production model hadany affect on these ecosystem indicators (Table 29). However, those communities inforestry associations significantly more often reported improvement in both forest coverover the last 10 years and wildlife abundance (over the last 5 years), as displayed inFigure 8. Future research will explore the kinds of programs these communitiesparticipated in and the connection to the perceived changes in the ecosystem.

Table 29: Changes in Environmental Quality

Forest cover Water quality Species abundance1 = much less 1 = very high 1 = much greater

4 = much greater 4 = very low 4 = disappearedVertical integrationNo-sale 2.83 2.67 2.67Stumpage 2.76 2.65 2.65Roundwood 3.25 2.42 1.92Lumber 3.00 2.67 2.17Internal organizationCommunity 2.96 2.62 2.35Work group 3.00 2.20 2.20Individual 2.90 2.70 2.50Forestry associationNonmembers 2.67 2.58 2.83Members 3.07 2.59 2.17Total 2.95 2.59 2.37Source: Survey data

As a method of preliminary exploratory analysis, we ran regressions of all the performanceindicators discussed above on the internal organization descriptors and a set of othervariables. These other variables are distance to a population center of over 500 persons,fuelwood dependence as a poverty indicator, percent of community members in the localpopulation, and local population density. The variable for internal organization ismeasured two ways, first as a binary variable equal to one if the community organizesproduction by either work groups of individualized systems, zero otherwise; the second as abinary variable equal to one if internal organization is individualized. A principalcomponents technique combines and scores the measures in Table 28 to create a singlevariable that takes positive and negative values for conservation practices, with positivevalues indicating “better” practices.23 For many performance indicators, internal

22Forest cover used a four-point scale indicating less than half of forest cover 10 years ago, somewhat less,equal, more; water quality scoring indicated high, medium, low, very low; and species abundance was scoredfor greater, same, less, disappeared.

23Regression were also run on the individual variables of conservation practices.

68

05

10

15

05

10

15

Less than half Menos Mismo Mayor

Not FA member

FA memberF

req

ue

ncy

Change in forest cover

05

10

15

05

10

15

Menos Mismo Mayor

Not FA member

FA member

Fre

qu

en

cy

Change in wildlife abundance

Source: Survey data

By FA membership

Ecosystem changes

Figure 8: Ecosystem changes by association membership

organization had no effect. Table 30 shows regression results where the internal productiontype does have an effect at the 10% level or better. First, there is a narrower range ofinvestments in public goods (Column 1) driven by the individualized communities (Column2). This is only impact related to public goods which we found so far, including testing foreach separate public good (e.g. schools, churches) (e.g. column 3). There was no internalorganization impact on range of reinvestments in forestry (column 4), but subcommunitygroups are less likely to diversify forest uses, a result also driven by the individualizedgroups (Column 6). No organizational impact on conservation practices was found (column7). Further research will refine these models to clarify these statistical associations.

One of the working hypotheses suggests that decisions which have a broad impact on a setof stakeholders will be taken in forums where a broader set of stakeholders are directlyinvolved in the decisionmaking. Furthermore, where this matching of decision impact withdecisionmaking cost occurs, we would expect to see greater long-term investments inpublic, forestry and environmental goods. Assuming that allocation of forestry profits(revenues after all costs have been paid) is one such decision having a broad impact oncommunity members, we test whether performance indicators are higher when the GeneralAssembly is involved in the profit-distribution decision, as described in Table 16. Fromregressions of the performance measures, Table 31 shows where using the GA for profitdecisionmaking has a significantly positive effect on performance measures. Namely,schools are more likely to receive investment, the range of forestry reinvestment is likely tobe broader, and conservation practices may be of higher quality, though this last effect isonly borderline significant.

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Table 30: Impact of Subcommunity Organization

(1) (2) (3) (4) (5) (6) (7)PG-

RangePG-

rangeSchools Range-

rein.Diversify Diversify CP

OLS OLS Probit OLS Probit Probit OLSSub-c div. -0.14* -0.45 -0.12 -1.15+ -0.37

(-2.71) (-0.55) (-1.07) (-1.95) (-1.42)Distance -0.02 -0.01 -0.23 -0.08 -0.76+ -0.78+ 0.05

(-0.68) (-0.63) (-0.56) (-1.55) (-1.71) (-1.76) (0.41)Fuelwood depend. 0.21+ 0.22+ 6.92* 1.37* 0.42 0.43 2.01*

(1.85) (1.90) (2.52) (5.37) (0.37) (0.36) (3.63)Member density 0.00 0.19 -10.84+ 0.18 4.19 6.94

(0.01) (0.44) (-1.79) (0.19) (1.01) (1.47)Individualized -0.17* -1.88*

(-2.98) (-2.12)Pop. density -0.31

(-1.45)Constant 0.10 0.08 -3.99+ -0.29 -0.26 -0.39 -1.37*

(0.86) (0.73) (-1.95) (-1.19) (-0.24) (-0.35) (-2.63)N 35 35 35 35 35 35 28Adj. R-sq 0.23 0.26 0.56 0.60Pseudo R-sq 0.66 0.20 0.26t-statistics in parentheses: + p<0.10, * p<0.05

Table 31: Impact of Using GA for π-Distribution

(1) (2) (3)Schools Range-rein. Cons. prac.Probit OLS OLS

GA forum 1.29* 0.22+ 0.44(2.74) (1.92) (1.68)

Distance -0.06 0.12(-1.22) (0.99)

Fuelwood 1.11* 1.99*(5.12) (3.87)

Member density -0.37+ -1.05*(-1.87) (-2.61)

Constant -0.10 -0.20 -1.76*(-0.41) (-1.25) (-4.71)

N 41 36 28Adj. R-sq 0.61 0.65Pseudo R-sq 0.16

t-statistics in parentheses: + p<0.10, * p<0.05

70

5 Conclusions

5.1 Purpose of study

The purpose of this study is to summarize data from the National Forestry Survey Projectin Mexico and provide a snapshot of the the conditions characterizing Mexican forestcommunities using a randomly stratified sample of forest communities in Durango andMichoacan. Data sources are responses from a unique community-level survey instrumentdesigned for the project and secondary government data. Forty-one communities wereinterviewed for the study, as well as the corresponding forestry professionals andgovernment agents serving these communities.

The general theme of our research is to analyze how economic governance affectssocio-economic and environmental indicators. Transaction cost economics and thecollective action literature relating to common property natural resources provide theframework for more specific analysis. The description presents strictly data associations inthe form of correlations, differences in means, χ2 tests and exploratory econometricanalysis as a preliminary assessment of trends and patterns across communities.

5.2 Summary of findings

5.2.1 General

• Significant regional variations exist in population size and trends, household wealth,internal organization and forestry networks. Population growth is lower, with aparticularly marked decrease in Durango from 1990 to 2000, where populations ofeach community tend to be smaller in general than in Michoacan.

• For basic community characteristics, as vertical integration increases, population sizeswithin each community tend to decrease, with greater percentage of members as partof the population.

• Among the communities harvesting timber, more integrated communities tend to befurther from town or market centers and conventional standard of living indicatorsfrom the Census 2000 data decrease.

• Communities show a strong presence of indigenous culture, where about 50% haveresidents who speak the local indigenous language. These communities tend to belarger on average than those without indigenous speakers.

71

5.2.2 Production

• Volume Authorized volumes are declining over the time period 1990-2010 and manycommunities are harvesting 100% of their authorized volume. The roundwoodcommunities most often complete their annual harvests with 100% of their authorizedvolume. Uncertainty in finding: whether the downward trend is real or reflectsadministrative gaps in reporting for more recent years.

• Prices More vertically integrated communities and communities organizingproduction by work groups or individuals with larger forests earn a price premium ascompared to other communities selling the same product. However, the largevariation in prices and small numbers within each group leave differences statisticallyinsignificant.

• Employment Despite having no commercial activity, the no-sale group employs arelatively large number of persons throughout the year, most likely on an irregularbasis, for reforestation and conservation efforts. Most communities hire a largepercentage of their workforce locally. The stumpage group has the largest gap inlocal and nonlocal employment. Employment increases with vertical integration andsize of the forest.

5.2.3 Institutional analysis

The institutional analysis draws on the common property, transaction cost and contracttheory literature and was designed around three broad focal questions concerning Mexicancommunity forestry. Through the descriptive statistics, we explore how benefits areassociated with institutions. The main findings under each question are below.

1. Under what conditions have communities chosen to participate in themarket for forest resources and at what level in the production chain?

• Variables explaining vertical integration in the south (from a study on Oaxaca)do not explain vertical integration in Durango and Michoacan. These variablesinclude forest size and social measures on a similarly sized sample using similarregression techniques. Forest size is not enough to explain vertical integrationand particular types of institutional evolution, particular to each region, mayhave implications for transaction costs for communities in each region.

• Communities in Durango and Michoacan fluctuate over time in end productsold, rather than exhibiting linear progression of investments forward. There hasbeen several circumstances of de-integration instead of forward integratingacross communities in the same time period (1997 and 2007).

72

• Communities often sell timber at various stages of processing, e.g. roundwoodcommunities also sell stumpage, and lumber communities sell stumpage androundwood.

• Livelihood strategies are apparent in the use of wage advances and choice ofvertical integration. The choice of vertical integration level can change within acommunity from year to year while equipment remains idle if a less processedgood is sold.

2. How have they organized their production and contracting activitieswithin the community governance structures?

• Decisionmaking responsibilities follow not a pattern of vertical integration butpatterns of internal governance, showing variation of governance possible withineach vertical integration level. So vertical integration is not a static or fixed typeof institution but can be managed in many ways.

• Sub-community level production, where it occurs, tends to take the form of workgroups in Durango and individualized production in Michoacan.

• Individualized production organization is more likely to have started prior to the1992 Agrarian Reform as part of a historical pattern of forest usage which is notalways related to timber production.

• Both vertical integration levels and forest size are negatively correlated with thesub-community level models of production organization.

• The other production organization models, i.e. work groups and individuals, aremost likely an institutional choice arising from management needs. Bothstatistical tests and informant interviews link the internal division to some formof unsatisfactory management of forestry activities.

• The forums chosen for making key decisions in forestry management, from apreliminary point of view, support Zusman’s hypothesis that decisions withgreater marginal impact on individual will be made by a larger set of persons ormore demanding (i.e. costlier) choice rule. For example, the profit allocationdecision patterns still have a General Assembly role despite internalorganizational model or vertical integration level.

• NGOs as external players are scarce in this sample.

• Durango has a strong presence of forestry associations as political and economicforces relative to Michoacan and Oaxaca. While communities with long historiesof forestry are both in bottoms-up and top-down inter-community organizations,communities with shorter forestry histories are being incorporated into mainlytop-down organizations.

3. How do governance characteristics, including both internal and externalinfluences in the decisionmaking processes, affect the distribution of

73

public and private benefits from forest activities, including environmentalconservation practices, public goods investments, and direct economicbenefits?

• Outcomes by internal organization are mixed. While there is some negativeimpact associated with the work group and individual production modes, theimpacts were not uniformly negative across all our performance measures for thenon-community-level operations.

• Forestry reinvestment increases with vertical integration and forestry associationmembership, while it decreases with individualized modes of production. Typesof investment differ across categories as well. Road maintenance is frequentacross the board, but investment is less varied with lower integration, division orlack of FA membership. If the community subdivides its production activities, itis less likely to diversify forestry activities away from timber production.

• The impact on local public goods depends on the type of public goods.Investment in schools and potable water increases with vertical integration.Investment in schools increases with FA membership. Sub-communityorganization of production leads to a narrower range of public goodsinvestments (more concentrated in schools, for example). Further analysis willcheck for pre-existing preferences associated with both division and outcomes.

• For the year in which the survey took place, the roundwood communities hadthe highest per person dividends (repartos) paid to community members.Community-organized production had higher repartos than the work groupcommunities, but the individualized production communities had the most perperson, evidently at the expense of other investments.

• Environmental outcomes showed little variation over vertical integration levels.The work group and individualized production model communities had moreclandestine harvesting of timber while the individualized communities alsotended to clear land intended for forestland. Membership in forestry associationsrelates to seeing an increase in forest cover over the ten years prior to the survey.Otherwise, outcomes show no consistent variation and future research will refinethese results.

To summarize this institutional component, we found mixed patterns consistent with theview that institutions are endogenous, that is, they depend on other factors and furtherdetails are necessary to understand how benefits are generated. The institutions themselvesmay represent an optimal choice given constraints communities face. Increasing verticalintegration, for example, does not guarantee certain forestry management outcomes butreflects an economically and/or socially feasible choice given the characteristics of eachcommunity and its trading environment. Furthermore, internal organization modes maynot inherently map to specific outcomes but reflect a cost-minimizing, or optimizing with

74

constraints, decision - where costs and constraints are interpreted here in a broad sense toinclude social, political and economic considerations. This view allows for the possibilitythat “good” forestry is achievable across a variety of institutional settings within theagrarian community forestry sector. How that is achieved may depend on both internalfactors explored here as well as external factors such as the contractual environment andpolitical context. An institutional approach would look at the distribution of assignedauthority, controls on parties contracting to forest products exchanges, ability ofstakeholders to make corrective measures for their leadership and other governancecharacteristics that affect the allocation of benefits flowing from the forest resource. Withthis view, we aim to shed light on the questions of how community forestry remains viableand persistent as an economic sector.

5.2.4 Questions for future research

• If the different governance structures of communal and sub-communal levels ofproduction organization can exist, what institutional (formal or informal)characteristics do they share that allows them viability? Are there other forms ofinstitutional change which are possible in the current system? How can furtheroptions be created?

• What role do forestry associations play in supporting the economic, social andenvironmental objectives for forestry management?

• What are sources of constraints on investments in this sector? Is it governmentpolicy, internal governance structure, bargaining power vis a vis the private sector ora combination of all?

• How can programs be designed to accommodate the different communitycharacteristics, including population and well-being factors as well as internalorganization.

• With authorized volumes declining over time for many communities, and manycommunities harvesting most of their authorized levels of harvest, where will gains inproductivity come from?

• What explains the increase versus decrease in well-being indicators with verticalintegration in different regions of Mexico and how does this pattern relate tolivelihood strategies? While the data show that forestry plays an important role inthe livelihood strategies of these communities, further details are needed on thetradeoffs at the individual level and the community level in balancing managementdecisions.

75

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A Comparison of Typologies

Table 32: World Bank TypologyType 1 Communities/ejidos with no forest management or extraction activities or

plansType 2 Communities/ejidos that sell standing timber (rentistas).Type 3 Communities/ejidos with forest enterprises who sell harvested wood but

have no other processing capacity.Type 4 Communities/ejidos that process as well as harvest their own wood.

Source: IBRD (1997).

Table 33: PROCYMAF II TypologyType 1 Potential producers: Owners or holders of forest land, which currently have no

actions for planning, use, conservation and management of forest ecosystems, andthat lack of forest management or sufficient means to defray the implementation.

Type 2 Producers who sell stumpage: The owners or holders of land subject to timberharvesting, in which it is done by a thrid party under contract of buy-sale withoutthe owner being involved in any stage of use.

Type 3 Forest raw material producers: The owners or holders of forest lands that haveallowed for use and that are directly involved in some stage of production chian,either in the cut and cut leaning on the road, in timber or in the colleciotn or cutand dried of nontimber products, as well as the transportation and sale of raw forestproducts to the collection centers and/or primary processing.

Type 4 Producers with primary processing capacity and marketing: Producers of raw forestmaterials that have infrastructure for primary processing to obtain sawn timber,packaged product or industrialized and directly market their products.

Type 5 Producers with secondary processing capacity and marketing: Producers of rawforest materials that have infrastructure for secondary processing for getting indus-trialized finished products, that direclty commericalize their products or throughproductive partnerships such as integration and production companies.

Source: Tovar (2009).

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Table 34: Ownership and Control TypologyType 1 Communities with commercially harvestable forestland but which do not participate

in timber marketType 2 Communities which contract with outside operators to extract timber material.

Labor is paid by the outside contractor. Machinery is usually brought in by outsidecontractor.

Type 3 Communities which contract services to extract timber and sell material as round-wood. Labor is usually hired from within the community but workers from outsidethe community may be contracted. Chainsaws may be owned by the individualworkers or the community.

Type 4 Communities which contract services to extract and sell sawnwood. Usually thesawmill is owned by the community but the sawmill may also be owned in commonwith other communities or rented.

Type 5 Communities which contract services to sell sawnwood and transformed secondaryor finished wood products, like tool handles, furniture, doors, and moldings. Usu-ally, milling and processing machinery is owned by the community but may beowned in common with other communities or rented.

Source: Antinori (2000).

Table 35: Internal Organization and Management TypologyDescription % as of 1993Comunidades y ejidos que han consolidado una organizacio internafuerte y han logrado mantener o incrementar el ritmo de crec-imiento del recursos forestales

4.0 %

Comunidades y ejidos que no han logrado consolidar su organizaciointerna y no han podido mantener la calidad de su recurso forestal

27.5 %

Comunidades y ejidos con problemas internos fuertes y significativadegradacion de sus recursos forestales

68.5 %

Source: Madrid (1993).

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Table 36: Organizational Capacity TypologySuccessful and well-organizedcommunities

Organized for the extraction of wood and transformation of in-termediate industrial products and which make formal use of theforest.

Limited success and organization sell roundwood, sawnwood and refined wood, with collection pointsin the communities or nearby urban centers. They have a mediumor large sawmill, machinery for tool handles and a crate-makingcapacity.

Technical problems and mediumlevel of organization

Have small and less efficient sawmill and sell tablas (rough hewnlogs) on the community site.

Intermediaries for raw materialand less organized

Sell roundwood; may also collect and sell fuelwood and nontimberforest products; constructs and maintains roads.

Rentistas and without organiza-tion

Do not have resources or experience as other communities; contractclauses set by buyers; sell stumpage at less than market value; littletechnical knowledge or market knowledge and no funds to investin equipment.

Out of formal market Extract only for informal markets - domestic use and regional mar-kets; no relation with formal industrial forestry.

Source: Nahmad (2004).